Types of Agriculture Government Loans

- Anita J.

There are six types of Agriculture Government Loans available. An explanation of each loan is below.

The Commodity Marketing Assistance Loans and Loan Deficiency Payments is for intended to provide loans to assist farmers in marketing their crops and as a result help to improve and stabilize the income of their farm. In order to qualify for this type of loan you must have been a rancher who was considered a professional in the agricultural production or farming. The interest rate and amount of loans vary according to the needs of the individual. The length of the loan is normally 10 months without any prepayment penalties.

The Farm Operating Loans are for farmers that are temporary unable to obtain private or commercial credit. These loans must be used to purchase items that are necessary to operate a farm successfully including such things as livestock, farm equipment, feed, seed, fuel, farm chemicals, repairs, insurance or other operating expenses. In order to qualify for this loan you must a be US citizen or a permanent resident, not owe any Federal debt, should have a good credit history for the repayment of loans, not have a conviction for controlled substances, no outstanding judgments, you must be the operator of the farm and you cannot obtain credit anywhere else. This loan can be for up to 7 years; however, most annual operating expenses are repaid with one year. Interest rates for the loan are determined by the Government’s cost of the funds.

The Farm Ownership Loans has some of the same qualifications as the loan above but a few that are different such as the person applying for the loan must own and operate a “family sized” farm when the loan is closed. You must also have enough money to pay back the loan and enough collateral to fully secure the loan. This loan will aid beginning to help them purchase a farm or ranch, build new structures, improve the real estate, promote soil and water conservation, and pay loan closing costs. The time to repay the loan cannot exceed 40 years. Interest rates vary according the Government’s cost of funds.

Farm Storage Facility Government Loans are intended to encourage the construction of on-farm grain storage capacity and to help farmers change to individual preserved storage and handling requirements for genetically enhanced production. The only qualifications for this loan are that you must not be delinquent on Federal nontax debt and you must be the owner or will soon be the owner of the farm. The maximum loan length is 7 years and the most you can borrow is $100,000.

Fisheries Finance Program is a direct government loan program that receives an annual loan authority from Congress to provide long-term loans to the aquaculture, mariculture, and commercial fisheries industries.  With this loan the person can receive up to 80 percent-depreciated actual cost of an eligible project cost, however, they must have the other 20 percent.

The Rural Housing – Farm Labor Housing Loans and Grants provides funds to buy, build, improve, or repair housing for farm laborers, including persons whose income is earned in aquaculture (fish and oyster farms) and those engaged in on-farm processing.