Q: Who qualifies as a socially disadvantaged farmer or rancher?
A: USDA defines socially disadvantaged applicants as those applicants who have been subjected to racial, ethnic or gender prejudice because of their identity as members of an identified group without regard to their individual qualities. Such groups include women, American Indians, Hispanics and African Americans.
Q: What kind of loans are available?
A: FSA has direct loans or guaranteed loans. Direct loans are made to applicants by FSA. Guaranteed loans are made by lending institutions who arrange for FSA to guarantee the loan. FSA can guarantee up to 95% of the loss of principal and interest on a loan. The FSA guarantee allows lenders to make agricultural credit available to producers who do not meet the lender's normal underwriting criteria.
Q: What can the loans be used for?
A: Farm ownership loan funds may be used to purchase or enlarge a farm or ranch, purchase easements or rights of way needed in the farm's operation, build or improve buildings such as a dwelling or barn, promote soil and water conservation and development and pay closing costs.
Farm operating loan funds may be used to purchase livestock, poultry, farm equipment, fertilizer, and other materials necessary to operate a successful farm. Operating Loan funds can also be used for family living expenses, refinancing debts under certain conditions, paying salaries for hired farm laborers, installing or improving water systems for home, livestock, or irrigation use and other similar improvements.
Q: What are the repayment terms?
A: Repayment terms for direct operating loans depend on the collateral securing the loan and usually run from one to seven years. Financing for direct farm ownership loans cannot exceed 40 years. Interest rates for direct loans are set periodically according to the government's cost of borrowing. Guaranteed loan terms and interest rates are set by the lender.
FSA targets some of its direct and guaranteed loan funds for social disadvantaged farmers and ranchers. Women, American Indian, African Americans and Hispanics are among those who qualify. The loans can be used for many purposes, including buying land, livestock, equipment and operating inputs.
For more information, contact your FSA office or see www.fsa.usda.gov.
Source: North Dakota Farm Service Agency