FSA Loans
FSA Guaranteed Farm Loans for Farmers and Ranchers
FSA Loans & Lending Program Details
An FSA loan is farm financing backed by the U.S. Department of Agriculture’s Farm Service Agency (FSA). With an FSA guaranteed loan, a commercial lender makes the loan and FSA guarantees it, so farmers and ranchers who cannot qualify for conventional credit can still borrow at reasonable terms. Commercial Finance Partners helps agricultural borrowers prepare and place FSA guaranteed financing.
FSA’s Guaranteed Farm Loan Programs allow family farmers and ranchers to obtain loans at reasonable terms to buy farmland or finance agricultural production. FSA loans can be used to purchase land, livestock, equipment, feed, seed, and supplies.
FSA loans are often provided to beginning farmers who cannot qualify for conventional loans because they have insufficient financial resources. FSA also helps established farmers who have suffered financial setbacks from natural disasters, or whose resources are too limited to maintain profitable farming operations.
FSA Loan Details:
- Loan amounts from $250K up to the FSA guaranteed loan limit, currently $2,558,000 (adjusted for inflation each fiscal year)
- Rate – WSJ Prime + 2.5%
- Up to 100% LTV Available
- Term – Thirty (30) year fully amortizing loan (FSA Farm Ownership loans cannot exceed 40 years; Operating Loans are normally repaid within 7 years)
- Must be located in the US and must be in a rural area (defined as having a population of less than 50,000)
How FSA Guaranteed Farm Loans Work
With an FSA guaranteed loan, the lender — not the borrower — is the Farm Service Agency’s customer. The lender makes and services the loan, and FSA guarantees it against loss, which lets the lender approve credit it could not otherwise extend. The interest rate and payment terms are negotiated between the lender and the borrower and may not exceed the maximum rates FSA sets.
FSA can currently guarantee Farm Ownership, Operating and Conservation loans of up to $2,558,000; the limit is adjusted for inflation each fiscal year. Land Contract Guarantees are capped at $500,000, and the EZ Guarantee offers a simplified application for loans of up to $100,000.
FSA Farm Ownership Loans
FSA farm ownership loans can be used to buy farmland, construct or repair buildings and other fixtures, develop farmland to promote soil and water conservation, or refinance debt. Guaranteed Farm Ownership loans can have repayment terms of up to 40 years. For land purchases outside the FSA program, compare our farm, ranch and timber land loans.
FSA Operating Loans
FSA operating loans pay for livestock, farm equipment, feed, seed, fuel, farm chemicals, insurance and other operating expenses, as well as minor building improvements, land and water development, family living expenses and, under certain conditions, refinancing. They can be structured as term loans or lines of credit: operating loans are normally repaid within 7 years, and lines of credit can be advanced for up to five years.
FSA Loan Requirements
To qualify for an FSA guarantee, an applicant must:
- be a U.S. citizen or legal resident alien;
- have an acceptable credit history, as determined by the lender;
- have the legal capacity to take on the loan obligation;
- be unable to obtain the loan without an FSA guarantee;
- operate a family farm after the loan closes — and, for a Farm Ownership loan, own it;
- not be delinquent on any federal debt or have a disqualifying history of FSA debt forgiveness.
Conservation loan applicants do not have to meet the family-farm test or show that they cannot get credit elsewhere. Source: USDA Farm Service Agency, Guaranteed Farm Loans.
Rural businesses that are not farm operations may qualify for USDA B&I loans instead. See all of our USDA and agricultural loans.
FSA Loan FAQs
What is an FSA loan?
An FSA loan is farm financing backed by the U.S. Department of Agriculture’s Farm Service Agency. FSA either lends directly or guarantees loans that commercial lenders make. Guaranteed loans let farmers and ranchers who cannot qualify for conventional credit buy land, livestock, equipment and supplies, or cover operating costs, at reasonable terms.
How much can you borrow with an FSA guaranteed loan?
FSA can currently guarantee Farm Ownership, Operating and Conservation loans of up to $2,558,000, a limit that is adjusted for inflation each fiscal year. Land Contract Guarantees are capped at $500,000, and the simplified EZ Guarantee covers loans of up to $100,000.
What are the requirements for an FSA farm loan?
Applicants must be U.S. citizens or legal resident aliens, have an acceptable credit history, be unable to get the loan without an FSA guarantee, operate a family farm after closing (and own it, for a Farm Ownership loan), and not be delinquent on federal debt. The lender reviews credit; FSA reviews eligibility and approves the guarantee.
How long are FSA loan terms?
Operating loans are normally repaid within 7 years, and operating lines of credit can be advanced for up to five years. Guaranteed Farm Ownership loans can have terms of up to 40 years. The rate and payment terms are negotiated between the lender and the borrower and cannot exceed FSA’s maximum rates.
Can FSA loans be used to buy land?
Yes. FSA Farm Ownership loans can be used to purchase farmland, construct or repair buildings, develop land for soil and water conservation, or refinance debt. Commercial Finance Partners can help you compare an FSA guaranteed loan with conventional farm and ranch land financing.
Why Work with Commercial Finance Partners?
- Leverage Existing Assets
- Increased Working Capital
- Creative Deal Structure
- Alternative to Equity
- Growth Focused
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