Press Release Courtesy of the New Mexico Farm Service Agency
Salomon Ramirez, State Executive Director for the New Mexico Farm Service Agency (FSA), reminds producers that FSA has targeted loan funds for producers that are recognized as Socially Disadvantaged (SDA) farmers or ranchers. These loan programs are designed to help farmers purchase and operate family farms.
With these loan programs, FSA’s mission is to reverse the declining number of farmers and ranchers across the United States and to encourage and assist them in owning and operating their own farms and ranches, participate in agricultural programs, and become integral parts of the agricultural community.
FSA reserves a portion of its loan guarantee funds each year for SDA loans. Ramirez says SDA’s are individuals or entities who are members of a SDA group. A SDA group is a group whose members have been subjected to racial, ethnic, or gender prejudice because of their identity. These groups consist of American Indian or Alaska Natives, Asians, Blacks or African Americans, Native Hawaiians or Pacific Islanders, Hispanics and women.
Direct loans are made to applicants by FSA and include both farm operating and farm ownership loans.
Guaranteed loans also may be made for farm ownership or operating purposes, and may be made by any lending institution, subject to Federal or State supervision, who make agriculture type loans (banks, savings and loans, credit unions, and units of the Farm Credit System including the Bank for Cooperatives) and guaranteed by FSA. Typically, FSA guarantees 90 or 95 percent of a loan against any loss that might be incurred if the loan fails.
According to Ramirez, “Repayment terms for direct operating loans depend on the collateral securing the loan and usually run from 1 to 7 years and repayment terms for direct ownership loans can be as long as 40 years.”
Guaranteed loan terms are set by the lender. Interest rates for direct loans are set periodically according to the Government’s cost of borrowing. Interest rates for guaranteed loans are established by the lender.
Farm ownership loan funds may be used to purchase or enlarge a farm or ranch, purchase easements or rights of way needed in the farm’s operation, build or improve buildings such as a dwelling or barn, promote soil and water conservation and development, and pay closing costs.
Farm operating loan funds may be used to purchase livestock, poultry, farm equipment, fertilizer, and other materials necessary to operate a successful farm. Operating Loan funds can also be used for family living expenses, refinancing debts under certain conditions, paying salaries for hired farm laborers, installing or improving water systems for home, livestock, or irrigation use, and other similar improvements.
Applications for all FSA direct loan programs are made through FSA’s local county offices. Producers interested in these loans should visit their local county office for eligibility, application and related program details.
USDA is an equal opportunity employer and provider.
