Direct Farm Ownership Microloans are meant to make a down payment on a farm; build, repair, or improve buildings; fund soil and water conservation projects; be used as a down payment farm ownership loan; and be used in joint financing.
No appraisal is needed. Verification of non-farm income is unnecessary unless required for repayment. Successful repayment of an FSA youth loan may be used towards the required 3 years of management experience. FSA's Direct Farm Ownership loan interest rate applies to Farm Ownership Microloans.
Traditional and non-traditional family farms and ranches may be eligible for Microloan financing.
General eligibility requirements include:
must not have Federal or State conviction(s) for planting, cultivating, growing, producing; harvesting, storing, trafficking, or possession of controlled substances;
have the legal capacity to incur the loan obligation;
be able to show an acceptable credit history;
is a citizen, non-citizen national or legal resident alien of the United States;
have no previous debt forgiveness by the Agency, including a guarantee loan loss payment;
be unable to obtain sufficient credit elsewhere, with or without an FSA loan guarantee;
not be delinquent on any Federal debt, other than IRS tax debt, at the time of loan closing;
not be ineligible due to disqualification resulting from Federal Crop Insurance violation; and
3 years farm management experience within 10 years of the application dates.
1 year of farm management experience may be substituted with one of the following:
- 16 credit hours Post-Secondary Education in Agriculturally-related field
- Business management, of at least 1 year direct management experience (not manager in title only)
- Military leadership or management from having completed an acceptable military leadership course
- Successful repayment of an FSA Youth loan