Farm Loans

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UNITED STATES DEPARTMENT OF AGRICULTURE

FARM SERVICE AGENCY FACT SHEET December 2016

Highly Fractionated Indian Land Loan Program (HFIL)

BACKGROUND

Highly Fractionated Indian Land Loan Program (HFIL), 

amended by the 2014 Farm Bill, provides a way for 

tribes and tribal members to obtain loans to purchase 

fractionated interests through intermediary lenders.

Fractionation occurs because reservation land was 

divided and allotted to individual tribal members 

through the General Allotment Act of 1887 (also called 

the Dawes Act). Since that time, in each generation 

when an allottee died without a will, the land was not 

divided and parceled among heirs, but instead title 

ownership for the single parcel was divided among 

many owners. This means the same parcel of land once 

owned by a single person could now be owned by up 

to hundreds, even thousands, of individuals with each 

inheriting an undivided interest in the land. The number 

of owners grows exponentially through each generation, 

resulting in highly fractionated ownership of many 

allotments of Indian land, and the problem continues to 

grow.

The ability of the owners to use land decreases as 

fractionation increases, sometimes to the point where 

it is nearly impossible to locate the owners or for the 

known owners to coordinate the use of the property. 

This program seeks to alleviate this by providing a way 

to consolidate the fractionated interests.

ELIGIBILITY REQUIREMENTS FOR AN 

INTERMEDIARY LENDER

To be eligible for HFIL, an intermediary lender may be 

a bank, credit union or other financial or tribal institution 

approved by the U.S. Department of Agriculture 

(USDA) to participate in HFIL. Intermediary lenders 

must have:

• Knowledge and familiarity of working with Indian 

Country and experience of working with Bureau of 

Indian Affairs;

• Legal authority necessary for carrying out the 

proposed loan purposes and for obtaining, giving 

security for and repaying the proposed loan; and

• An adequate assurance of repayment of the loan 

based on the fiscal and managerial capabilities of 

the proposed intermediary lender.

ELIGIBILITY REQUIREMENTS FOR AN 

ULTIMATE RECIPIENT

An ultimate recipient is a Native American tribe, tribal 

entity or member of either that receives a loan from an 

intermediary lender’s HFIL revolving fund. To receive a 

loan from the intermediary, they must:

• Comply with highly erodible land conservation and 

wetland conservation requirements on all their land;

• Agree to continue to use the land for agricultural 

purposes during the term of the loan;

• Agree to comply with the requirements of the 

intermediary lender;

• Funds may be used to pay costs incidental to land 

acquisition, including, but not limited to, title 

clearance, legal services, archeological or land 

surveys, and loan closing;

• May be used to pay for costs of an appraisal 

conducted for this loan; and

• Be able to purchase fractionated interests resulting 

in at least 51 percent ownership.

FOR MORE INFORMATION

Further information on HFIL is available at local Farm 

Service Agency (FSA) offices or on FSA’s website at 

www.fsa.usda.gov. Visit http://offices.usda.gov to 

locate the nearest FSA office or service center.

_________________________________________

In accordance with Federal civil rights law and U.S. Department of Agriculture 

(USDA) civil rights regulations and policies, the USDA, its Agencies, offices, and 

employees, and institutions participating in or administering USDA programs are 

prohibited from discriminating based on race, color, national origin, religion, sex, gender identity (including gender expression), sexual orientation, disability, age, marital 

status, family/parental status, income derived from a public assistance program, political beliefs, or reprisal or retaliation for prior civil rights activity, in any program or 

activity conducted or funded by USDA (not all bases apply to all programs). Remedies 

and complaint filing deadlines vary by program or incident.

Persons with disabilities who require alternative means of communication for program 

information (e.g., Braille, large print, audiotape, American Sign Language, etc.) 

should contact the responsible Agency or USDA’s TARGET Center at (202) 720-2600 

(voice and TTY) or contact USDA through the Federal Relay Service at (800) 877-

8339. Additionally, program information may be made available in languages other 

than English.

To file a program discrimination complaint, complete the USDA Program Discrimination Complaint Form, AD-3027, found online at http://www.ascr.usda.gov/complaint_filing_cust.html and at any USDA office or write a letter addressed to USDA 

and provide in the letter all of the information requested in the form. To request a copy 

of the complaint form, call (866) 632-9992. Submit your completed form or letter to 

USDA by:

1) mail: U.S. Department of Agriculture Office of the Assistant, Secretary for Civil

 Rights 1400 Independence Avenue, SW, Washington, D.C. 20250-9410;

2) fax: (202) 690-7442; or

3) email: program.intake@usda.gov.

USDA is an equal opportunity provider, employer, and lender.