Farm Operating Loans

To enable operators of not larger than family farms through the extension of credit and supervisory assistance, to make efficient use of their land, labor, and other resources, and to establish and maintain financially viable farming and ranching operations.

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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.

Office - See Regional Agency Offices.

Contact the appropriate FSA State Office listed in Appendix IV of the Catalog.

Visit the FSA website at www.fsa.usda.gov.

Relevant Nonprofit Program Categories





Program Accomplishments

Fiscal Year 2015: Direct OL: $1,251,216,000 Guaranteed OL $1,365,450,000 Actual Direct Operating Loans made in FY 2016 were 22,681 with actual obligations of $1,251,216,000. Actual Guaranteed Operating Loans made in FY 2016 were 4,835 with actual obligations of $1,365,450,000. Fiscal Year 2016: Direct OL: $1,252,117,000 Guaranteed OL: $1,395,968,000 The Agency estimates 22,000 Direct Operating Loans being made in FY 2016 for total obligations estimated at $1,252,117,000. Through August 9, 2016, there were 21,736 loans made with a value of $1,242,491,000. The Agency estimates 4,600 Guaranteed Operating Loans being made in FY 2016 for total obligations estimated at $1,395,968,000. Through August 9, 2016, there were 4,585 loans made with a value of $1,395,674,000. Fiscal Year 2017: Direct OL: $1,460,047,000 Guaranteed OL: $1,432,430,000 The Agency estimates 27,000 Direct Operating Loans being made in FY 2017 for total obligations estimated at $1,460,047,000. The Agency estimates 5,000 Guaranteed Operating Loans being made in FY 2017 for total obligations estimated at $1,432,430,000.

Uses and Use Restrictions

Loan funds may be used to: (1) Purchase livestock, poultry, and other farm animals; (2) purchase farm equipment, feed, seed, fuel, farm chemicals, insurance (3) provide operating expenses for farm enterprise; OL funds can be used to pay for: (4) minor improvements to buildings (5) costs associated with land and water development (6) family subsistence (7) refinance debts under certain conditions and (8) finance youth projects.

( Use restrictions are shown under Applicant Eligibility.

Eligibility Requirements

Applicant Eligibility

Except for youth loans, individual applicants must: (1) Be a citizen of the Untied States, United States non-citizen national, or a qualified alien under applicable Federal immigration laws; (2) have the legal capacity to incur the obligations of the loan; (3) be unable to obtain credit elsewhere or unable to obtain the loan without a guarantee; (4) not have had a previous loan which resulted in a loss to the Agency (with certain conditions); (5) not be delinquent on any federal debt; (6) after the loan is closed, be an owner/tenant operator of a family farm.

For an operating loan (OL), the producer must be the operator of a family farm; (7) not have been convicted of crop insurance fraud (in certain circumstances); and (8) not have any controlled substance convictions.

In addition, a direct loan applicant must have sufficient education, training, or experience in managing and operating a farm or ranch that demonstrates the managerial ability to succeed in farming.

Corporations, cooperatives, joint operations, and partnerships and their members/stakeholders must meet most of these same eligibility requirements, and the entity must also be authorized to operate a farm or ranch in the State where the land is located.

To be eligible to obtain a direct loan, a borrower must agree to abide by any 'borrower training' requirements.

Applicants/borrowers requesting guaranteed loan assistance must meet all lender requirements.

Beneficiary Eligibility

Applicants/borrowers are the direct beneficiaries and must meet the applicant eligibility requirements Families, individuals, and entities who are or plan to become farmers, ranchers or aquaculture operators are the beneficiaries.

Credentials/Documentation

Applicants for direct loans must be unable to obtain credit elsewhere and applicants for guaranteed loans must be unable to obtain credit without the guarantee. 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. Applicants may apply for direct loans at local FSA offices. If the total outstanding direct operating loan debt combined with direct farm ownership debt will be less than $50,000, it would be considered a direct microloan. Microloans have a seperate application process. Guaranteed loans may be available from local commercial lenders who apply for loan guarantees from FSA.

Award Procedures

FSA determines if the applicant is eligible and reviews the application for repayment ability, security, and compliance with other regulations, approves and obligates the loan.

Deadlines

Not Applicable.

Authorization

Farm and Rural Development Act, as amended, Subtitle B, Sections 311-317, Public Law 92-419, 7 U.S.C. 1942; Agriculture Act of 1961, Title III, Public Law 87-128.

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

From 30 to 60 days. Applicants for direct and guaranteed loans, may appeal adverse action taken. The applicant is given an opportunity to appeal the decision to the National Appeals Division. The applicant may, in the final step of the appeals process, request a review by the Director, National Appeals Division, 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. Matching requirements are not applicable to this program. MOE requirements are not applicable to this program.

Length and Time Phasing of Assistance

Loans are scheduled for repayment over periods up to 7 years, but when justified, loans may be consolidated or rescheduled for up to 15 additional years. 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. See the following for information on how assistance is awarded/released:. Method of awarding/releasing assistance: lump sum.

Post Assistance Requirements

Reports

Not Applicable.

Audits

Not Applicable.

Records

Records on production, income, expenses during the period of the loan.

Financial Information

Account Identification

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

Obigations

(Direct Loans) FY 15 $1,251,216,000; FY 16 est $1,252,004,000; and FY 17 est $1,460,047,000. (Guaranteed/Insured Loans) FY 15 $1,365,450,000; FY 16 est $1,393,443,000; and FY 17 est $1,432,430,000

Range and Average of Financial Assistance

Direct Farm Operating Loans up to $300,000. ($50,000 total or less is considered a microloan); Guaranteed Farm Operating Loans up to $1,399,000. (Amount adjusted annually.).

Regulations, Guidelines, and Literature

7 CFR, Part 761, 762, 764. Farm Service Agency Fact Sheets; FSA Handbook 1 FLP, 2 FLP, 3-FLP; Program Aids 1610 'Farm Service Agency Producer's Guide to Loan Programs'; 1620 'Lender's Guide to FSA 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

See Regional Agency Offices. Contact the appropriate FSA State Office listed in Appendix IV of the Catalog. Visit the FSA website at www.fsa.usda.gov.

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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