EVERSON — The Farm Service Agency of the U.S. Department of Agriculture offers specially targeted farm ownership and farm operating loans to underserved applicants as well as beginning farmers and ranchers.
Washington State FSA Acting Executive Director Rod Hamilton reminds producers of this targeted funding each year. In fiscal year 2019, which began Oct. 1, 2018, the amount is more than $34 million.
Marcy Maldonado is the farm loan officer for the Whatcom County Service Center, in Suite C at 914 Citadel Dr., in a Hinote’s Corner building just southeast of the Pole and Hannegan roads intersection. The phone number is 360-592-6115.
There is no definite deadline for applying for this targeted funding. “We take applications year-round,” Maldonado said. However, FSA may be short on funding in August and September until a new budget is passed for the new fiscal year, she said.
USDA defines underserved applicants as a group whose members have been subjected to racial, ethnic or gender prejudice because of their identity as members of the group without regard to their individual qualities. For farm loan program purposes, underserved groups are women, African Americans, American Indians and Alaskan Natives, Hispanics and Asians and Pacific Islanders.
In order to qualify as a beginning farmer, the individual or entity must meet the eligibility requirements outlined for direct or guaranteed loans. Also, individuals and all entity members must have operated a farm for less than 10 years. Applicants must materially or substantially participate in the operation. For farm ownership purposes, the applicant must not own a farm greater than 30 percent of the average size farm in the county at the time of application. All direct farm ownership applicants must have participated in the business operations of a farm for at least three years out of the last 10 years prior to the date of application. If the applicant is an entity, all members must be related by blood or marriage and all entity members must be eligible beginning farmers.
Underserved or beginning farmers and ranchers who cannot obtain commercial credit from a bank can apply for either FSA 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 percent 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.
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.
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.
For more information on FSA’s farm loan programs and underserved and beginning farmer guidelines, contact the local FSA office. To find your local FSA office, visit http://offices.usda.gov.