FSA Guaranteed Loan Program
The FSA Guaranteed Loan Program provides lenders like Consumers Bank with a guarantee of up to 95 percent of the loss of principal and interest on a loan enabling them to lend to farmers who might not normally qualify for a loan.
FSA guaranteed loans are for both Farm Ownership and Operating purposes. Like the Direct Loan Program, a percentage of Guaranteed Loan funds are targeted to beginning farmers and ranchers and minority applicants.
Guaranteed Ownership Loans
Guaranteed Farm Ownership (FO) Loans may be made to purchase farmland, construct or repair buildings and other fixtures, develop farmland to promote soil and water conservation, or to refinance debt.
Guaranteed Operating Loans
Guaranteed Operating Loans (OL) may be used to purchase livestock, farm equipment, feed, seed, fuel, farm chemicals, insurance, and other operating expenses. Operating Loans can also be used to pay for minor improvements to buildings, costs associated with land and water development, family living expenses, and to refinance debts under certain conditions.
To qualify a loan applicant must:
- Be a citizen of the United States (or legal resident alien)
- Have an acceptable credit history as determined by the lender;
- Have the legal capacity to incur the obligations of the loan;
- Be unable to obtain a loan without a guarantee;
- Not have caused FSA a loss by receiving debt forgiveness on more than 3 occasions on or prior to April 4, 1996; or any occasion after April 4, 1996;
- Be the owner or tenant operator of a family farm after the loan is closed. For an OL, the producer must be the operator of a family farm after the loan is closed. For an FO Loan, the producer needs to also own the farm;
- Not be delinquent on any Federal debt.
In addition to meeting the eligibility criteria, the loan applicant must have a satisfactory credit history, demonstrate repayment ability, and provide sufficient security for the loan. Loan availability is subject to borrower meeting eligibility and credit guidelines. Terms are subject to change. FSA guarantee fee may apply