Conservation Loans

Conservation Loan (CL) program is to provide access to credit for farmers who need and want to implement conservation measures on their land but do not have the ?up front? funds available to implement these practices.

Unlike FSA?s traditional farm ownership and operating loan programs that are
targeted toward smaller and less financially established farmers, eligibility requirements for the CL program are expanded to permit FSA to provide assistance to some applicants who may be large and financially strong.

Agency - Department of Agriculture

Established in 1862, the Department of Agriculture serves all Americans through anti-hunger efforts, stewardship of nearly 200 million acres of national forest and rangelands, and through product safety and conservation efforts. The USDA opens markets for American farmers and ranchers and provides food for needy people around the world.




Program Accomplishments

Fiscal Year 2015: $1,355,000. Fiscal Year 2016: $1,399,000 The Agency 2 Guaranteed Conservation loans being made in 2016. Through August 9, 2016 there were 2 loans made with a value of $1,399,000. Fiscal Year 2017: $10,000,000 The agency estimates 10 Guaranteed Conservation loans being made in FY 2017.

Uses and Use Restrictions

CL funds can be used to implement a conservation practice approved by the Natural Resources and Conservation Service (NRCS),such as reducing soil erosion, improving water quality, promoting sustainable and organic agricultural practices.

Specific conservation practices include: installation of conservation structures, establishment of forest cover, installation of water conservation measures, establishment or improvement of permanent pastures, transitioning to organic production, manure management, including manure digestion systems, adaptation of other emerging or existing conservation practices, techniques or technologies.

Eligibility Requirements

Applicant Eligibility

An applicant must (1) Not have caused a loss to the Agency after April 4, 1996, or received debt forgiveness on more than three occasions prior to April 4, 1996 to receive a guaranteed loan, and for a direct loan, must not have received debt forgiveness from the Agency on any direct or guaranteed loan; (2) be a U.S.

citizen, non-citizen national or qualified alien; (3) posses the legal capacity to incur the obligations of the loan; (4) for a direct loan, have the necessary education and/or experience, training, and managerial ability to operate a farm; and (5) for a direct loan, fulfill the Agency's borrower training requirements.

If the applicant is an entity, it must be controlled by farmers engaged primarily and directly in farming in the U.S., after the loan is made.

Unlike other Agency loan programs, Conservation Loans are not limited to applicants who are unable to obtain sufficient credit from other sources at reasonable rates and terms or to those who are the owner or operator of a not larger than family size farm.

However, the applicant's operation must realistically project the ability to repay the loan.

Beneficiary Eligibility

Applicants are the direct beneficiaries and must meet the applicant eligibility requirements. Families, individual, and entities who are farmers are the beneficiaries.

Credentials/Documentation

No Credentials or documentation are required. This program is excluded from coverage under 2 CFR 200, Subpart E - Cost Principles.

Aplication and Award Process

Preapplication Coordination

Preapplication coordination is not applicable.

Environmental impact information is not required for this program.

This program is excluded from coverage under E.O.

12372.

Application Procedures

This program is excluded from coverage under 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. The following forms must be submitted by applicants: For Loan Guarantees FSA-2211 Application for Guarantee or FSA-2212 Preferred Lender Application for Guarantee Must be submitted with supporting information with the prospective lender Applicants must provide an approved NRCS conservation plan that includes the conservation measure for which loan funds are requested.

Award Procedures

Certification as to eligibility is made by the authorized agency official and an approval determination is made by the authorized agency official based on loan feasibility, soundness, and adequate security.

Deadlines

Not Applicable.

Authorization

The Consolidated Farm and Rural Development Act, Title XIV, Part A, Section 304, 7 U.S.C 1924.

Range of Approval/Disapproval Time

The loan approval official approves or disapproves a completed application. The average approval time for direct loans is 30 days and 10 days for guaranteed loans.

Appeals

Applicants for direct and guaranteed loans may appeal an adverse decision. The applicant is given an opportunity to appeal the decision to the National Appeals Division. The applicant may in the final step of the appeal process ask for a review of the decision by the Director of the National Appeals Division in Washington, DC.

Renewals

Applicants may reapply at any time. Applicants denied assistance through the appeal process must establish that substantial change has occurred since the denial decision.

Assistance Considerations

Formula and Matching Requirements

Statutory formulas are not applicable to this program. This program has no matching requirements. The selected criteria identify essential elements considered necessary to compare the needs of the various States, and to make the best use of available program funds. MOE requirements are not applicable to this program.

Length and Time Phasing of Assistance

Loans are scheduled for repayment over periods up to 20 years for direct loans and up to 30 years for guaranteed loans depending on the type of security available. The interest rate for guaranteed loans is negotiated between the lender and borrower. The interest rate for direct loans is determined by the Secretary of Agriculture. Method of awarding/releasing assistance: lump sum.

Post Assistance Requirements

Reports

Not Applicable.

Audits

Not Applicable.

Records

Not applicable.

Financial Information

Account Identification

12-4213-0-3-351 - Guaranteed Loans Financing Account; 12-4212-0-3-351 - Direct Loans Financing Account; 12-1140-0-1-351.

Obigations

(Direct Loans) FY 15 $1,355,000; FY 16 est $150,000,000; and FY 17 est $150,000,000. (Guaranteed/Insured Loans) FY 15 $1,355,000; FY 16 est $150,000,000; and FY 17 est $150,000,000 - There were no Loans obligated in FY 2014.

Range and Average of Financial Assistance

Maximum indebtedness for direct loans, combined; farm ownership, conservation, soil and water, and recreation $300,000. Maximum indebtedness for guaranteed loans combined: farm ownership, conservation, and soil and water loan indebtedness of $1,399,000 (for FY 2017, amount adjusted annually for inflation).

Regulations, Guidelines, and Literature

7 CFR Parts 762 and 764. FSA Handbooks 2-FLP and 3-FLP. FSA Fact Sheets. Program Aid 'FSA Producer's Guide to Loan Programs'. FSA Brochure FSA-BR-01 Your Guide to FSA Farm Loans. above information is available on FSA website at:www.fsa.usda.gov.

Information Contacts

Regional or Local Office

None.

Headquarters Office

Connie Holman 1400 Independence Avenue, SW, Washington , District of Columbia 20250 Email: connie.holman@wdc.usda.gov Phone: 202-690-0756

Criteria for Selecting Proposals

Not Applicable.



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