Loans for Beginning Farmers
The Farm Service Agency (FSA) provides direct and guaranteed loans
to beginning farmers who are unable to obtain financing from
commercial credit sources. Each
fiscal year, the Agency targets a portion of its direct and
guaranteed farm ownership (FO) and operating loan (OL) funds to
beginning farmers and ranchers.
A beginning farmer or rancher is an individual or entity who (1) has
farm or ranch for more than 10 years; (2) meets the loan eligibility
requirements of the program to which he/she is applying; (3)
substantially participates in the operation; and, (4) for FO loan
purposes, does not own a farm
greater than 30 percent of the average size farm in the county.
(Note: all applicants for
direct FO loans must have participated in business operation of a
farm for at least 3
years.) If the applicant is an entity, all members must be
related by blood or marriage, and all stockholders in a corporation
eligible beginning farmers.
Maximum Loan Amounts
of indebtedness are:
Direct FO or OL:
or OL: $852,000 (Amount varies annually
based on inflation.).
Down Payment Farm Ownership Loan
FSA has a special down payment FO loan program to assist beginning
farmers to purchase a farm. This program also provides a means
retiring farmers to transfer their land to a future generation.
must make a cash down payment of at least 10
percent of the purchase price.
FSA may provide a maximum amount equal to 40 percent of
the purchase price or appraised value, whichever is
less. The term of the loan is 15 years at a fixed interest rate of 4 percent.
The remaining balance may be obtained from Kinderhook State Bank.
FSA can provide up to a 95 percent
guarantee and the guarantee fee may be waived.
The purchase price or appraised value, whichever is lower,
may not exceed $250,000.
Sale of Inventory Farmland
FSA advertises acquired farm property within 15 days of acquisition.
Eligible beginning farmers and ranchers are given first priority to
purchase these properties at
the appraised market value for the first 135 days after acquisition.
If more than one eligible beginning farmer offers to purchase
the property, the buyer is
Beginning farmer applicants may choose to participate in a joint
financing plan that is also
available to other applicants. In this program, FSA
lends up to 50 percent of the
amount financed, and Kinderhook State Bank provides 50
percent or more. FSA will charge a reduced interest rate on the
Where to Apply
Applications for direct loan assistance may be submitted to the FSA
local office serving the area where the operation is located. Local
FSA offices are listed in
the telephone directory
under U.S. Government, Department of Agriculture, Farm Service
Agency. For guaranteed loans, applicants apply to the Kinderhook
State Bank who participates in the Guaranteed Loan Program.
Further information about this and other FSA programs is available
USDA Service Centers or on the FSA website at: