Farm Ownership Loans can be used to purchase or expand a farm or ranch. This loan can help with paying closing costs, constructing or improving buildings on the farm, or to help conserve and protect soil and water resources.
Farm Ownership Loans offer up to 100 percent financing and are a valuable resource to help farmers and ranchers purchase or enlarge family farms, improve and expand current operations, increase agricultural productivity, and assist with land tenure to save farmland for future generations. With a maximum loan amount of $600,000 ($300,150 for Beginning Farmer Down Payment), all FSA Direct Farm Ownership Loans are financed and serviced by the Agency through local Farm Loan Officers and Farm Loan Managers. The funding comes from Congressional appropriations as part of the USDA budget.
There are 3 different types of qualifications for a direct farm ownership loan which need to be met:
- eligible farm enterprise
- general eligibility requirements
- farm management experience
First, the operation must be an eligible farm enterprise. Farm Ownership loan funds cannot be used to finance nonfarm enterprises, such as exotic birds, tropical fish, dogs or horses used for non-farm purposes (racing, pleasure, show and boarding).
All loan applicants must be able to meet the following general eligibility requirements:
- must not have Federal or State conviction(s) for planting, cultivating, growing, producing, harvesting, storing, trafficking, or possession of controlled substances
- have the legal ability to accept responsibility for the loan obligation
- have an acceptable credit history
- be a United States citizen, non-citizen national or legal resident alien of the United States, including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, and certain former Pacific Trust Territory
- 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
- be able to show sufficient farm managerial experience through education, on-the-job training and/or general farm experience, to assure reasonable prospect of loan repayment ability
- must be the owner-operator of a family farm after loan closing