In a recent announcement, Colorado’s USDA Farm Service Agency (acting) executive director Jenny Peterson reminds the state’s farmers and ranchers to take advantage of the FSA’s especially targeted farm ownership and farm operating loans. These loans especially cater to underserved applications who have a hard time getting a loan anywhere else.
These loans are not limited to Colorado citizens. The FSA’s programs cater to the needs of borrowers nationwide.Need a loan? Let us help you get started.
The agency is committed to support the state’s producers by providing them capital opportunities that they need to sustain their operations.
According to the US Department of Agriculture’s Economic Research Service, agriculture, food, and related industries contributed $992 billion to U.S. gross domestic product (GDP) in 2015. Without a doubt, the industry is a major contributor of revenue to the country. Thus, providing support and financial backing to these entrepreneurs must be one of the state’s foremost concerns.
This is exactly the efforts that the Colorado FSA wing is putting forward. For this fiscal year, the state’s FSA allotted $48,554,504 million worth of loans to hundreds of underserved beginning farmers and ranchers.
The mobilization of services not only helps these underserved groups roll out their own farm and ranch operations, it is also keeping the state’s agricultural hub productive, and serving the needs of the country as well as those of international demands.
Who are considered underserved applicants?
The USDA defines “underserved applicants” as those members of a group who are subjected to racial, ethnic, and/or gender prejudice primarily because of identifying to certain groups without considering their individual qualities.
These include women, African Americans, American Indians and Alaskan Natives, Hispanics and Asians and Pacific Islanders.
What are the eligibility requirements for these programs?
The agency has outlined certain standards that an applicant must meet to be approved for the program. They must have operated a farm for less than 10 years. They must actively participate in the farm or ranch operations, and must not own a farm greater than 30 percent of the average size farm in the county at the time of application.
Additionally, they 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 the application is submitted. If you are applying as an entity, all members of your organization must all be related by blood or by marriage and each must be eligible as beginning farmers.
There are two types of direct and guaranteed loans:
a) Farm ownership loan
This loan type can be used to:
- buy a farm or ranch
- enlarge a farm or ranch
- buy easements or rights of way
- build, repair, or improve existing farm or ranch buildings
- promote soil and water conservation
- develop and pay closing costs
b) Farm operating loan
You may use this loan to:
- buy livestock, farm equipment, fertilizer, and other necessary materials for farm operations
- fund family living expenses
- refinance debts
- pay salaries
- install and improve water systems
How are the loans repaid?
For direct operating loans, repayment is dependent on the collateral used to secure the loan but typically the repayment period may run from one to seven years.
Direct farm ownership loans cannot be financed for more than 40 years.
When it comes to interest rates, it is the lenders who regulate how much rates goes to guaranteed loans while those of direct loans are set periodically depending on the government’s cost of borrowing.
If you are interested, simply contact your local lender if they offer these special loan programs or you may visit your state’s FSA page to be adequately guided on how to initiate the process.Click to See the Latest Mortgage Rates»