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Farm Loans

Mark Cappel
UpdatedSep 29, 2010
Key Takeaways:
  • The USDA's Farm Service Agency administers direct and guaranteed farm loans.
  • Requirements for farm loans are many but not onerous.
  • Visit the Farm Service Agency Web site for detailed requirements.

What are the requirements to getting a farm loan?

Wondering about options for first-time home buyer looking at a "pre-fabrication" home. If you have to have 25% down at the time of purchase? Also I have questions about first time home buyer loans through Agriculture. What qualifies for an agriculture loan? If its the amount of acreage, or the animals on the property, etc? Thank you

According to the Web site, the U.S. Department of Agriculture's Farm Service Agency (FSA) makes farm ownership loans to farmers and ranchers who cannot obtain a loan from a bank and to beginning farmers. Loans can be used to purchase a farm or ranch; construct buildings or make other real estate improvements; promote soil and water conservation; and pay loan closing costs. Both "guaranteed" and "direct" loans are available though the Farm Service Agency.

Here are the requirements: To be eligible for a farm ownership loan from the Farm Service Agency, you must:

  1. Be a U.S. citizen or permanent resident
  2. Not be delinquent on a Federal debt
  3. Not have caused a loss to the Government by having a previous FSA debt forgiven
  4. Not have a poor history of repaying debts
  5. Not have any controlled substances convictions
  6. Own and operate a "family-sized" farm when the loan is closed
  7. Not have any outstanding judgments against you
  8. Be unable to obtain credit elsewhere.
  9. Applicants must have enough money to repay the loan and enough collateral to fully secure it.

Other eligibility criteria apply and can be found at the Farm Service Agency Farm Loan Programs Web page.

The maximum direct loan is $300,000, and the largest guaranteed loan is $1,112,000.

You asked about qualifications. The acreage of the property matters, but as implied above the applicant or applicants themselves must meet certain requirements to qualify for a USDA direct or guaranteed loan.

I hope this information helps you Find. Learn & Save.