- General Public
- Private Sector
Reserved for Energy
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What does this program do?
FSA Direct Farm Operating Loans may be used for normal operating expenses, machinery and equipment, minor real estate repairs or improvements, and refinancing debt.
Who may apply for this program?
Eligibility requirements for direct loans include:
- Be a citizen of the United States, a non-citizen national, or a qualified alien.
- Possess the legal capacity to obtain a loan.
- Unable to obtain credit elsewhere at reasonable rates and terms.
- Show a good credit history or show that failure to pay bills was due to circumstances beyond your control, was infrequent, or did not happen recently.
- Operation is a family farm or ranch, and the majority of the physcial labor and management is provided by you, a family member, or another enitity member.
- Have not received debt forgiveness (caused FSA to lose money) on another direct or guaranteed loan. (Exceptions apply; Contact an FSA loan officer for additional guidance or clarification.)
- Not behind on any debt (other than a debt under the Internal Revenue Code of 1986) that is owed to the U.S. Government when the loan is closed.
- Have the training, eduction, or experience that enables you to efficiently manage the farm or ranch.
Are there other requirements?
Operating loans must be essential to the success of the farming operation and only for the following purposes:
- Costs associated with reorganizing a farm to improve profitability.
- Purchase of livestock, including poultry.
- Purchase of farm equipment.
- Farm operating expenses.
- Minor improvements or repairs to buildings.
- Refinance certain farm-related debts, excluding real estate.
- Land and water development, use, or conservation.
- Loan closing and borrower training costs.
What are the rates and terms?
The maximum loan amount is $400,000. There is no down payment requirement.
All FSA Direct Operating Loans are financed and serviced by the Agency through local Farm Loan Officers and Farm Loan Managers.
Repayment terms vary depending upon the purpose of the loan, the loan applicant’s ability to pay, and when income is projected to be available.
General operating and family living expenses are normally due within 12 months or when the agricultural commodities sell. For larger purchases such as equipment, minor repairs, or livestock, the term will not exceed 7 years.
The interest rate charged is always the lower rate in effect at the time of the loan approval or loan closing for the type of loan wanted. Interest rates are calculated and posted the 1st of each month.