Farm Loans

Page 1

UNITED STATES DEPARTMENT OF AGRICULTURE

FARM SERVICE AGENCY FACT SHEET March 2016

Primary and Preservation Loan Servicing for Delinquent FSA Borrowers

When FSA borrowers are unable to make scheduled 

payments on their farm loan programs debt to the 

agency because of reasons beyond their control, 

Federal law provides a process by which their FSA 

loan accounts may be serviced to avoid foreclosure 

and liquidation.

• When a borrower becomes 90 days past due on 

an FSA loan account, the Agency provides a 

servicing packet outlining available options.

• Borrowers who respond with a completed 

application within 60 days from receipt of the 

packet are considered for restructuring of the debt 

-- rescheduling, reamortization, consolidation, 

deferral, or write-down of the amount owed -- as 

long as FSA will receive an equal or greater net 

return than it would realize through foreclosure.

• Borrowers who are not delinquent, but will not 

be able to make their next payment, may request 

the servicing packet at any time and may qualify 

for all of the options noted above, except writedown. (Federal law limits debt forgiveness to one 

instance of no more than $300,000.)

• Calculations to determine appropriate servicing 

options are made by the electronic Debt and Loan 

Restructuring System (eDALR$), a sophisticated 

computer program, using information provided 

by the borrower.

• The account may be restructured if a feasible 

plan is possible. If eDALR$ indicates that 

no feasible plan is possible, State-sponsored 

mediation or a meeting of creditors is offered.

• If restructuring is not possible after mediation, 

the borrower may have the opportunity to 

buyout the debt at the current market value of 

the security and any non-essential assets. The 

remainder of the debt is written off when the 

buyout is accomplished.

• If the borrower is unable to take advantage of 

the buyout option, FSA is required to proceed 

with foreclosure in an effort to recover as much 

as possible. In certain situations, borrowers may 

avoid foreclosure by voluntarily conveying the 

security property to the Government.

• Prior to such a conveyance or foreclosure, and 

again if FSA takes the property into inventory, 

borrowers are provided the opportunity to apply 

to lease with option to purchase their homestead 

and up to 10 adjoining acres of land, including 

farm buildings. To take advantage of Homestead 

Protection, borrowers must meet certain statutory 

requirements concerning farm income and 

continuous occupation of the property. The 

Agency will make every effort to allow qualified 

borrowers to remain in their homes.

FOR MORE INFORMATION

For more information about FSA and its programs, 

visit your local FSA office or online at 

www.fsa.usda.gov. To find your local FSA office, 

visit http://offices.usda.gov.

___________________________________________

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.