Helping farmers to access credit more easily is one of the goals for USDA, which is why they say they’re changing their loan programs through its Farm Service Agency.
“It’s really signals a new day in ag finance, for FSA is going to position itself as the leader in the example for how our friends in the lending community might consider doing this,” says Zach Ducheneuax, Administrator for USDA’s Farm Service Agency.
He says the three big changes they’re making to their loan programs are:
- Providing more flexible repayment terms.
- Adding more flexible servicing options.
- Lowering their collateral requirements.
“With this rule, we’re announcing that not more than 125 percent security will be taken in any loans that we make,” he says. USDA’s collateral requirement was previously as much as 150 percent of the loan amount.
They’re also removing the requirement that those who borrow pledge their primary residence as additional collateral.
“In some of our visits around the country, that’s been the biggest stresser for producers,” he says. “Many of them took a run at things and they just didn’t work out and they’re not going to be able to be in ag production. They’re thinking, “Boy, I sure hate that I have to lose Grandma’s house.” We’re taking that off the table with this rule, which is really a fundamental change the way we do business.
The FSA’s new changes to their farm loan program begin Sept. 25.
For more information, go to fsa.usda.gov.
Click BELOW to hear the radio news report from Hoosier Ag Today’s C.J. Miller:
