In times of drought, flood, or natural disaster, affected farmers and ranchers can turn to emergency farm loans for help with their own recovery efforts. These “special” loans are from the USDA’s Farm Service Agency, meant to cover the costs of rebuilding or restoring property damaged or lost due to the disaster.
Eligibility for emergency farm loans is open to farmers in areas declared by the President as a primary natural disaster or emergency area or designated by the Secretary of Agriculture as a quarantine area. Farmers/ranchers in adjoining areas may also qualify for this type of financing.
Take a look at how this loan program can help you or other farmers rebuild farming operations after the calamity.Learn more about USDA loan programs here.
Emergency Farm Loans in Times of Emergencies
The road to recovery after the devastation and damage brought by Hurricanes Harvey, Irma and Maria on homes and farms is just beginning. As Agriculture Secretary Sonny Perdue recognized, the impact of the disasters is expected to linger for several months.
To help farmers and ranchers during these hard times, the USDA has established procedures that will make it easier for these borrowers to claim disaster losses.
And it is in times of catastrophe when funding for emergency farm loans is triggered.
What is it for?
An emergency loan can be used to (i) pay part or all of the production costs for the disaster year, (ii) replace or restore an essential property, (iii) pay essential family living expenses, (Iv) reorganize farming operation, and (v) refinance certain debts.
Under the loan, you can borrow up to 100% of your physical losses or actual production or $500,000 at most.
Who is it for?
Aside from owning a farm in a disaster designated, declared or quarantined area, your losses caused by the natural disaster as specifically stated in the disaster declaration must be more than 30%.Get in touch with a USDA-approved lender.
Physical losses pertain to the amount needed to replace or restore real estate, chattel property, livestock or its products.
A U.S. citizen or a permanent resident, you must prove that you are an established farmer or rancher (owner-operator or tenant-operator) when the disaster struck and that you intend to continue with your farming operation.
As to being a borrower, you must show an ability to repay the loan, have an acceptable credit history, and can provide collateral securing the loan.
You must also have been denied of traditional financing, as properly supported by written declinations from commercial lenders.
Submit your loan application within eight months after the disaster declaration or designation.
How to repay it?
Repayment on emergency farm loans will depend on the useful life of the property, your ability to repay, and the type of loss incurred.
Per the FSA’s fact sheet, a standard repayment schedule requires at least one payment a year. For loans financing annual operating expenses, they must be repaid within 12 months.
Interest rates on emergency loans are whichever is lower at the time of loan approval or its closing date.
Contact your USDA state office to know more about the emergency loan program and other applicable public assistance you can avail of.Click to See the Latest Mortgage Rates»