Transferring The Farm With FSA Loan Programs

FSA loan program transfers farmland to the next generation of farmers

Published on: Jan 17, 2013

Mark Cadle, State Executive Director for Missouri USDA Farm Service Agency (FSA), reminds landowners that the Land Contract Guarantee Program is available to landowners who wish to transfer farm real estate to the next generation of farmers and ranchers.

The Land Contract Guarantee Program provides a new approach for landowners willing to sell their land to beginning or socially disadvantaged farmers or ranchers because it reduces the seller's financial risk if the buyer defaults on the contract payments. The buyer must provide a minimum down payment of 5%of the purchase price, plan to operate the farm, and demonstrate the ability to make the land contract payments.

The national program offers two options, one that guarantees up to three annual installment payments on the contract and one that guarantees 90% of the unpaid principal of the contract. Guarantees can be used for financing the purchase of a farm with a purchase price up to $500,000 on a new land contract.

The Land Contract Guarantee Program provides a new approach for landowners willing to sell their land to beginning or socially disadvantaged farmers or ranchers because it reduces the sellers financial risk if the buyer defaults on the contract payments.
The Land Contract Guarantee Program provides a new approach for landowners willing to sell their land to beginning or socially disadvantaged farmers or ranchers because it reduces the seller's financial risk if the buyer defaults on the contract payments.

"Landowners can use any escrow agent that meets the program qualifications to service the land contract," said Cadle. "Landowners interested in the Land Contract Guarantee Program can contact their local farm loan office to obtain a list of available nationwide escrow agents that can be used with this program," he said.

FSA credit programs are designed to provide credit to eligible producers when conventional or commercial credit is not available or does not meet their credit needs.

"FSA programs create opportunities for farmers and ranchers - the backbone of our rural economy," said Cadle.

For more information about the Land Contract Guarantee Program contact your local FSA county office.