The U.S. Department of Agriculture is updating its agricultural loan programs to better support current borrowers, including historically underserved producers.
These enhancements are part of USDA’s commitment to increase equity for all programs, including agricultural loans that provide significant access to capital to cover operating expenses and the purchase of land and equipment. equipment, according to a press release from the USDA Farm Service Agency in Bangor.
“The USDA remains committed to addressing the barriers faced by all borrowers, especially those in economic difficulty, new and beginning producers, socially disadvantaged, or otherwise underserved,” said Zach Ducheneaux, Administrator of the Farm Service Agency of the USDA. “We recognize that lending and servicing activities are essential for producers, especially in difficult times. This enhancement to our agricultural loan programs recognizes the needs of producers and, more importantly, enacts fair relief provisions to ensure they receive a fair share.
The 2018 Farm Bill authorized the agency to provide equitable relief to certain direct borrowers who fail to comply with program requirements due to good faith reliance on material action, advice, or lack of action. an FSA official. Previously, borrowers could be required to repay the loan immediately or convert it to a non-program loan with higher interest rates, less favorable terms and limited loan service.
Now, the agency has additional flexibilities to help borrowers in such situations. If the agency provided incorrect advice to an existing direct loan borrower, the agency may award equitable relief to that borrower. The FSA may assist borrowers by allowing them to retain their loans at current rates or other terms received in association with the loan that has been found to be non-compliant, or the borrower may receive other equitable relief for the loan that the FSA may agency deems appropriate.
The USDA encourages producers to contact their local loan officers to ensure they fully understand the wide range of loan and service options available that can help them start, expand or maintain their operation.
Additional information about these changes is available in the March 8 rule at federalregister.gov.