United States Department of Agriculture

Farm Service Agency

United States Department of Agriculture

Farm Service Agency

Your Guide to FSA Farm Loans
Your Guide to FSA Farm Loans

Purpose of This Guide

Who should read this guide?

This guide was written for people who need 

assistance starting, expanding, or owning a farm or 

ranch. If you are thinking about borrowing money 

to start or expand your business, it is a good idea 

to ask yourself several questions before you begin. 

Before you borrow money, you need to invest time 

in learning about your options and the procedures 

to apply for a loan. This guide will help you identify 

concerns and questions you may have before you 

start the loan process.

It may be helpful to use this guide with someone 

who can direct you to more sources of farming 

or ranching information, such as an experienced 

farmer or rancher, community-based organization, 

or other service provider. You may want to involve 

your family when reviewing this guide to make sure 

everyone understands the process and risks involved 

in owning a business and borrowing money.

1
Your Guide to FSA Farm Loans 2
Your Guide to FSA Farm Loans 3

Table of Contents

Introduction to the Farm Service Agency’s Farm Loan Programs ................. 6

• Guaranteed Loan Program

• Direct Loan Program

• Land Contract Guarantee Program

What Types of Loans Are Available?................................................................ 9

 - Overview

 - Description of Loan Types

 - Loan Rates and Terms

 - Targeted Funds for Beginning and Socially Disadvantaged

 Farmers and Ranchers

 - Eligibility Requirements

Why Do You Need a Business Plan?.............................................................. 22

• The Purpose of Your Business Plan

• Business Plan Guides for Farmers and Ranchers

• Obtaining Assistance To Develop Your Business Plan

• Business Plan Formats

• Business Plan Guidelines

How Do You Apply for a Guaranteed Loan? .................................................. 32

• Preparing a Guaranteed Loan Application

• Submitting a Guaranteed Loan Application

What Happens After Your Lender Submits a

Guaranteed Loan Application to FSA?........................................................... 33

• FSA’s Processing of the Guaranteed Application 

• If the Application for a Guarantee Is Approved

• If the Application for a Guarantee Is Not Approved
Your Guide to FSA Farm Loans

How Will Your Guaranteed Loan Be Serviced?.............................................. 36

• Lender Responsibilities

• Your Responsibilities

• FSA Responsibilities

How Do You Apply for a Direct Loan?............................................................ 37

• Preparing Your Direct Loan Application

• Submitting Your Direct Loan Application

What Happens After You Submit Your

Direct Loan Application to FSA? .................................................................... 41

• FSA’s Processing of Your Direct Loan Application

• If Your Direct Loan Is Approved

• If Your Direct Loan Is Not Approved

What Are Your Responsibilities as a Direct Loan Borrower?........................ 47

What Credit Supervision Does FSA Provide to

Direct Loan Borrowers?.................................................................................. 49

• Year-End Analyses 

• Chattel Checks

• Normal Income Security

• Basic Security

• Graduating to Commercial Credit

What Loan Servicing Options Will Be Available to

Direct Loan Borrowers?.................................................................................. 51

• Disaster Set-Aside (DSA)

• Primary Loan Servicing (PLS) for Financially Distressed and

 Delinquent Borrowers

How Do You Apply for a Land Contract Guarantee? ..................................... 55

• Preparing a Land Contract Guarantee Application

• Submitting a Land Contract Guarantee Application

4
Your Guide to FSA Farm Loans

What Happens After You or the Seller Submits a

Land Contract Guarantee Application?.......................................................... 57

• FSA’s Processing of the Land Contract Guarantee Application 

• If the Application for a Land Contract Guarantee Is Approved

• If the Application for a Land Contract Guarantee Is Not Approved

How Will Your Land Contract Guarantee Be Serviced? ................................ 59

• Escrow or Servicing Agent Responsibilities

• Your Responsibilities

Special Considerations for American Indian/Alaskan

Native Producers and/or Any Producer Utilizing Land

Held in Trust by the Bureau of Indian Affairs................................................. 60

Appendix A: Resources and Contact Information........................................ 61

• USDA Agencies

• Other Organizations

• Additional Resources for American Indians/Alaskan Natives

Appendix B: Definition of Terms.................................................................... 70

5
Your Guide to FSA Farm Loans

Introduction to the Farm Service Agency’s 

Farm Loan Programs

As a farmer or rancher, whether you are just starting out or have many years of 

experience, there are times when you need to borrow money to start, expand, 

sustain, or make changes to your business. If you are thinking about applying 

for a loan, consider the following:

• Do you want to buy or lease a farm or ranch?

• Do you need to buy things like a tractor, livestock, irrigation pipes, or a 

greenhouse for your farm or ranch?

• Do you already own or rent farmland/ranchland and want to expand your 

business?

• Has a natural disaster, such as drought, flooding, or a bad storm, ruined your 

crops or damaged your farm buildings or equipment?

6
Your Guide to FSA Farm Loans

If you answered ‘yes’ to any of these questions, you may want to apply for a 

loan from the Farm Service Agency (FSA).

FSA is an agency of the U.S. Department of Agriculture (USDA). You may 

be able to get a loan or loan guarantee through FSA’s Farm Loan Programs if 

you are a farmer or rancher who is unable to obtain credit elsewhere to start, 

purchase, sustain, or expand your family farm. Unlike loans from a commercial 

lender, FSA loans are temporary in nature, and our goal is to help you graduate 

to commercial credit. Once you are able to obtain credit from a commercial 

lender, our mission of providing temporary, supervised credit is complete.

Appendix A provides a list of USDA agencies and other organizations that you 

can contact for more information on agriculture, developing business plans, and 

obtaining help in applying for a loan. You will find definitions for some of the 

terms used in this guide in Appendix B.

This guide will help you get started in the process of applying for an FSA loan 

or obtaining a loan guarantee for your farm or ranch. FSA loan officers can 

help you with your application. For some parts of your application, such as 

developing your business plan, you may need to ask for advice from a business 

advisor or other professional. Everyone’s situation is different, so applying for a 

loan may be different for you than for another farmer or rancher going through 

the same process.

7
Your Guide to FSA Farm Loans

Guaranteed Loan Program

Guaranteed loans are made and serviced by 

commercial lenders, such as banks, the Farm Credit 

System, or credit unions. FSA guarantees the 

lender’s loan against loss, up to 95 percent. FSA 

has the responsibility of approving all eligible loan 

guarantees and providing oversight of the lender’s 

activities.

Direct Loan Program

Direct loans are made and serviced by FSA using 

Government money. FSA has the responsibility 

of providing credit counseling and supervision to 

its direct borrowers by helping applicants evaluate 

the adequacy of their real estate and facilities, 

machinery and equipment, financial and production 

management, and goals. 

Land Contract Guarantee Program

Land contract guarantees are available to the owner 

of a farm or ranch who wishes to sell real estate 

through a land contract to a beginning or socially 

disadvantaged farmer or rancher.

8
Your Guide to FSA Farm Loans 9

What Types of Loans Are 

Available?

Overview

FSA has different types of loans that you can apply 

for, depending on your current situation and what 

you need the loan for. This guide will help you 

answer the following questions:

• What type of loan do I need?

• Do I meet the requirements for a loan?

• What is the loan application process?

• What forms or documents do I need to apply?

Farm ownership, operating, and conservation 

loans are available under the Guaranteed Loan 

Program. Farm ownership, operating, emergency, 

and conservation loans are available under the Direct 

Loan Program. FSA offers two types of guarantees 

under the Land Contract Guarantee Program.
Your Guide to FSA Farm Loans 10

Description of Loan Types

Before you apply, you need to decide what type of 

loan you need. You may need to apply for more than 

one type of loan at the same time if you need money 

for different purposes. FSA loan types include the 

following:

Farm Ownership loans will help you purchase or 

enlarge a farm or ranch, construct a new or improve 

an existing farm or ranch building, pay closing 

costs, and pay for soil and water conservation and 

protection.

Operating loans will help you purchase livestock 

and equipment and pay for minor real estate repairs 

and annual operating expenses.

Emergency loans will help you if you suffered 

a qualifying loss caused by natural disasters that 

damaged your farming or ranching operation. 

Emergency loan funds may be used to restore 

or replace essential property, pay all or part of 

production costs associated with the disaster year, 

pay essential family living expenses, reorganize the 

farming operation, and refinance certain debts.

Conservation loans will help you complete a 

conservation practice in an approved conservation 

plan.
Your Guide to FSA Farm Loans 11

Land contract guarantees provide certain financial 

guarantees to the seller of a farm or ranch through 

a land contract sale to a beginning or socially 

disadvantaged farmer or rancher. The seller may 

request either of the following:

• Prompt Payment Guarantee: A guarantee up to

the amount of three amortized annual

installments plus the cost of any related real

estate taxes and insurance. The seller must

choose a third-party escrow agent who will

handle transactions related to the contract.

• Standard Guarantee: A guarantee of

90 percent of the outstanding principal

balance under the land contract. The

seller must choose a third-party servicing

agent.

The chart on the next page provides additional details 

for the different types of loans and the maximum 

loan amounts. You may request any amount up 

to the maximum. The rates and terms of the loan 

address the interest rate that will be charged and the 

maximum number of years you will make payments 

on the loan.
Your Guide to FSA Farm Loans 12

Farm Loan Programs Information Chart

Type of Loan

Direct Farm Ownership

Direct Down Payment

Direct Operating

Direct Emergency

Guaranteed Farm

Ownership

Guaranteed Operating

Guaranteed Conservation

$300,000

The lowest of the following:

● 45% of the farm or ranch

 purchase price

● 45% of the appraised value

● $225,000

$300,000

The lowest of the following:

● 100% actual or physical 

 losses

● $500,000

The maximum loan amount is

adjusted annually for inflation*

The maximum loan amount is

adjusted annually for inflation*

The maximum loan amount is

adjusted annually for inflation*

● Term: Up to 40 years ● Interest rate: fixed**

● Term: Up to 20 years ● Interest rate: fixed**

● Term: 1 to 7 years ● Interest rate: fixed**

● Term: 1 to 7 years

 (possibly up to 20 years)

 for non-real estate purposes

● Up to 40 years for physical

 losses on real estate

● Interest rate: fixed**

● Term: Up to 40 years ● The interest rate is negotiated

 by you and your lender.

● Term: 1 to 7 years ● The interest rate is negotiated

 by you and your lender.

● Term: Up to 20 years ● The interest rate is negotiated

 by you and your lender.

Maximum Loan Amount Rates and Terms
Your Guide to FSA Farm Loans 13

Farm Loan Programs Information Chart Continued

Type of Loan

Land Contract Guarantee A maximum purchase price of

$500,000 on a new land contract

● Term: Contract payments must

 be amortized for a minimum of

 20 years with equal payments

 during the term of the

 guarantee. The guarantee

 period is 10 years.

● Interest rates must be fixed and

 cannot exceed the direct farm

 ownership interest rate plus

 3 percentage points.

Maximum Loan Amount Rates and Terms

*To determine the maximum loan limit for the current year, please check with your local 

FSA loan offi cer at http://offi ces.sc.egov.usda.gov/locator/app or our website at

http://www.fsa.usda.gov/Internet/FSA_File/guaranteed_farm_loans.pdf.

**Direct loan interest rates are adjusted monthly and are posted online at

http://www.fsa.usda.gov/FSA/webapp?area=home&subject=fmlp&topic=fi r and at your 

local FSA offi ce. Once your loan is closed, the interest rate is fi xed at the rate in eff ect on the 

date of loan approval or loan closing, whichever is lower.

Note: FSA off ers other types of loans, such as marketing assistance loans and 

farm storage facility loans. Th ese are not part of FSA’s Farm Loan Programs 

and, therefore, may have diff erent application or eligibility requirements. For 

more information on these and other programs off ered by FSA, please visit our 

website at http://www.fsa.usda.gov.
Your Guide to FSA Farm Loans 14

Loan Rates and Terms

When you receive a loan from FSA or another 

lender, you have to pay back the loan amount 

(principal), plus an additional amount of interest. 

“Rate” is the interest rate charged on your loan from 

FSA or your commercial lender. The period of time 

you are making payments on the loan is called the 

loan “term.” The amount of interest that you will 

pay is based on the interest rate and loan term.

The interest rate is shown as a percentage rate 

(%). A lower interest rate means that the cost of 

borrowing the money is lower, so you pay a smaller 

amount in interest. A higher interest rate means that 

the cost is higher, and you will pay more to borrow 

the money. Some interest rates are fixed, which 

means that the percentage rate (%) stays the same for 

the entire time you are paying back your loan. Other 

rates are variable, which means that the percentage 

rate (%) can change periodically while you are 

paying back your loan. With a variable interest rate, 

the rate can either increase or decrease. FSA direct 

loans and land contract guarantees have fixed interest 

rates. Guaranteed loans may have either fixed or 

variable interest rates.
Your Guide to FSA Farm Loans 15

The loan term is usually based on the use of the 

loan funds and the collateral that secures the loan. 

Generally, a loan made for real estate purposes will 

have a longer term than a loan made to purchase 

equipment or livestock. In addition, a loan that is 

secured by real estate may have a longer term than 

a loan secured by equipment or livestock. A longer 

loan term will reduce your yearly payment amount, 

but will increase your total interest cost.

Amortization is the established schedule for paying 

off a debt over time through regular payments. It 

is based on the interest rate and term of a loan, and 

shows the amount of each payment put towards 

interest, as well as the amount put towards the 

principal balance. Initially, a large portion of each 

payment is applied to interest. Over time, a larger 

portion goes towards paying down the principal.

The example on the next page shows an amortization 

schedule for a $30,000 operating loan with a 

5-percent interest rate and a 7-year term. For each 

of the 7 years, you can see how much of your yearly 

payment goes toward paying interest and principal 

on the loan.
Your Guide to FSA Farm Loans 16

Amortization Schedule

Year

5.00% $30,000.00

1

2

3

4

5

6

7

$5,185.00

$5,185.00

$5,185.00

$5,185.00

$5,185.00

$5,185.00

$5,185.00

$3,685.00

$3,871.00

$4,063.00

$4,266.00

$4,479.00

$4,703.00

$4,933.00

$1,500.00

$1,314.00

$1,122.00

$919.00

$706.00

$482.00

$252.00

$26,315.00

$22,444.00

$18,381.00

$14,115.00

$9,636.00

$4,933.00

$0.00

Annual Payment Principal Interest Loan Balance

Targeted Funds for Beginning and Socially Disadvantaged 

Farmers and Ranchers

FSA is referred to as the “Lender of First Opportunity” because each year it 

targets some of the direct and guaranteed loan funds for beginning and socially 

disadvantaged farmers or ranchers. FSA sets aside money specifically to help 

farmers or ranchers who are just starting up, or who are members of a group 

which has been subjected to racial, ethnic, or gender prejudice because of their 

identity, without regard to their individual qualities. In addition, land contract 

guarantees are only available on land contracts to a beginning or socially 

disadvantaged farmer or rancher.
Your Guide to FSA Farm Loans 17

You may qualify for direct or guaranteed loan funds as a beginning farmer or 

rancher if you started farming or ranching less than 10 years ago. You are a 

socially disadvantaged farmer or rancher if you are:

• American Indian or Alaskan Native

• Asian

• Black or African American

• Native Hawaiian or other Pacific Islander

• Hispanic

• a Woman
Your Guide to FSA Farm Loans 18

Eligibility Requirements

Depending on the type of loan you want, you will have to meet certain 

eligibility requirements. Different types of loans have different eligibility 

requirements. Examples of general eligibility requirements are below. If you 

answer “no” to any of the requirements, we recommend that you discuss the 

requirement further with an FSA loan officer.

Eligibility Requirements for Direct Loans (farm ownership,

operating, emergency)

I have the training, education, or experience that will enable me to e	ectively

manage my farm or ranch.

For farm ownership loans only: I have participated in the business operations

of a farm or ranch for at least 3 out of the last 10 years.

For beginning farmer or rancher targeted funds only: I have operated a farm

or ranch for 10 years or less.

For beginning farmer or rancher targeted funds only: If I currently own a

farm or ranch, it is less than 30% of the median farm size in my county.

For down payment loans only: I can make a cash down payment of at least

5% of the purchase price for the farm or ranch I want to buy, and its price is

less than $500,000.

For emergency loans only: My operation is in a county that has a disaster

designation, and it has not been more than 8 months since the designation

was declared. I su	ered a production loss (at least 30%) or a physical loss due

to the designated disaster.

YES NO
Your Guide to FSA Farm Loans 19

Eligibility Requirements for Direct Loans (farm ownership,

operating, emergency) Continued

I am a citizen of the United States, a non-citizen national, or a qualied alien.

I possess the legal capacity to obtain a loan.

I am unable to obtain credit elsewhere at reasonable rates and terms.

I can show that I have a good credit history (I pay my bills on time) or, if I

do not, I can show that my failure to pay my bills was due to circumstances

beyond my control, was infrequent, or did not happen recently.

My operation is a family farm or ranch, and the majority of the physical labor

and management is provided by me, a family member, or another entity

member. 

I have not received debt forgiveness (caused FSA to lose money) on

another direct or guaranteed loan. 

Note: Debt forgiveness does not include debt reduction through a

conservation contract, a write-down provided as part of a discrimination

complaint or to claimants in certain legal settlements, or prior debt

forgiveness that has been repaid in its entirety. (Contact an FSA loan ocer

for additional guidance or clarication.)

I will not be behind on any debt (other than a debt under the Internal

Revenue Code of 1986) that I owe to the U.S. Government when the loan

is closed.

YES NO
Your Guide to FSA Farm Loans 20

Eligibility Requirements for Guaranteed Loans (farm

ownership, operating, conservation)

I am a citizen of the United States, a non-citizen national, or a qualied alien.

I possess the legal capacity to obtain a loan.

e lender will not approve my loan without an FSA guarantee.*

I have not received debt forgiveness (caused FSA to lose money) on another

direct or guaranteed loan. 

Note: Debt forgiveness does not include debt reduction through a

conservation contract, a write-down provided as part of a discrimination

complaint or to claimants in certain legal settlements, or prior debt

forgiveness that has been repaid in its entirety. (Contact an FSA loan o­cer

for additional guidance or clarication.)

My operation is a family farm or ranch, and the majority of the physical labor

and management is provided by me, a family member, or another entity

member.*

I will not be behind on any debt (other than a debt under the Internal

Revenue Code of 1986) that I owe to the U.S. Government when the loan

is closed.

YES NO
Your Guide to FSA Farm Loans 21

*This requirement does not apply to a conservation loan.

**These eligibility requirements apply to the buyer under the land contract. 

Additional eligibility requirements apply to the seller.

Eligibility Requirements for Land Contract Guarantees**

I am a beginning or socially disadvantaged farmer or rancher.

I am a citizen of the United States, a non-citizen national, or a qualied alien.

I possess the legal capacity to enter into a legally binding agreement.

e seller is unwilling to enter into the land contract without an

FSA guarantee.

I can show that I have a good credit history (I pay my bills on time) or, if I

do not, I can show that my failure to pay my bills was due to circumstances

beyond my control, was infrequent, or did not happen recently.

My operation is a family farm or ranch, and the majority of the physical labor

and management is provided by me, a family member, or another

entity member.

I have not received debt forgiveness (caused FSA to lose money) on a direct

or guaranteed loan. 

Note: Debt forgiveness does not include debt reduction through a

conservation contract, a write-down provided as part of a discrimination

complaint or to claimants in certain legal settlements, or prior debt

forgiveness that has been repaid in its entirety. (Contact an FSA loan ocer

for additional guidance or clarication.)

I will not be behind on any debt (other than a debt under the Internal

Revenue Code of 1986) that I owe to the U.S. Government when the

guarantee is issued.

YES NO
Your Guide to FSA Farm Loans 22

Why Do You Need a Business Plan?

The Purpose of Your Business Plan

Your business plan is like a road map that shows how you will move from where 

you are now to where you want your operation to be in the future. A good 

business plan that describes your financial and lifestyle goals will help you to 

evaluate your progress as you establish your new operation or continue your 

farm or ranch in the future. Your business plan is very important. It shows that 

you have seriously thought about your goals and plans for the future and that 

you understand all parts of your operation. 
Your Guide to FSA Farm Loans

In order to get an FSA loan, a guarantee on a loan 

made by a commercial lender, or a land contract 

guarantee, you need to create a detailed business plan 

that describes:

•	 your mission, vision, and goals for your farm or 

ranch.

•	 your current assets (property or investments you 

own) and liabilities (debts, loans, or payments 

you owe).

•	 what your operation will produce, and how and 

where you will market and sell your products. 

This is sometimes referred to as a marketing plan.

•	 whether the amount of income your operation 

will generate will be enough to pay your business 

and family living expenses.

23
Your Guide to FSA Farm Loans

A comprehensive business plan is an important first 

step for any size business‒no matter how simple or 

complex. You should create a strong business plan 

because it:

• will help you get organized and can help you 

to make sure you are taking all of the necessary 

steps and remembering all of the details.

• will act as your guide. It will help you to think 

carefully about why you want to farm or ranch 

and what you want to achieve in the future. 

Over time, you can look back at your business 

plan and determine whether you are achieving 

your goals.

• is required to get a loan. Lenders look closely at 

business plans to determine if you can afford to 

repay the loan.

24
Your Guide to FSA Farm Loans

Business Plan Guides for Farmers 

and Ranchers

Below are examples of agricultural business planning 

guides that can help you think about all of the 

important parts of your operation. These products 

are for reference only and do not represent the 

opinions of FSA, nor does FSA endorse any specific 

commercial product. There may be other 

products available that you would prefer. 

Building a Sustainable Business: A Guide to 

Developing a Business Plan for Farms and

Rural Businesses

Developed by the Minnesota Institute for Sustainable 

Agriculture, and published by the Sustainable 

Agriculture Research and Education.

Available free online at: 

http://www.misa.umn.edu/Publications/

BuildingaSustainableBusiness/index.htm

25
Your Guide to FSA Farm Loans 26

Small Farm Decision-Making &

Enterprise Planning Workbook

North Carolina State University Cooperative Extension. 

(c)1992

Available free online at:

Accion USA Business Plan Template

Accion USA Small Business Resources. (c)2007

Available free online at:

Small Farm

Decision-Making

&

Enterprise Planning Workbook

STATE UNIVERSITY

A&T STATE UNIVERSITY

COOPERATIVE

EXTENSION

Helping People Put Knowledge to Work

NC

Ways to Grow

ACCION USA 

Business Plan 

____________________________________ 

Business Name 

____________________________________ 

Name(s) of Owner(s) 

____________________________________ 

Address, City, State Zip 

Phone number: ___________________ Fax number: ___________________ 

Executive Summary

COMPLETE LAST. This should summarize the major characteristics of your business and plan into one or two 

pages (attach additional pages if needed). Copy appropriate parts of Sections 1-2 into this section. If you are 

applying for a loan, you will read this executive summary to the group to summarize your business and why you 

need a loan.

Write 2-3 short paragraphs on the topics below: 

A brief business description, your business mission and your products and services (copy from section 1). 

Your customers (income, ethnicity, gender), how large the market is, what part of the market you now serve, 

 what part of the market you would like to serve, and how you reach your target market. 

Your competition and the advantages your business has over other similar businesses. 

Your goals for the next three years, including marketing plans, new products or services, and resources 

 you will need to meet your goals (money, employees, etc.). 

If you are applying for a loan, describe your plans for the loan period, indicate how much you are applying 

 for, how you will use the loan, and how it will help you carry out your plans. 

_____________________________________________________________________

_____________________________________________________________________

_____________________________________________________________________

_____________________________________________________________________

_____________________________________________________________________

_____________________________________________________________________

_____________________________________________________________________

_____________________________________________________________________

_____________________________________________________________________

_____________________________________________________________________

_____________________________________________________________________

_____________________________________________________________________

_____________________________________________________________________

_____________________________________________________________________ 

_____________________________________________________________________ 

_____________________________________________________________________ 

_____________________________________________________________________ 

Business Plan 1

http://agmarketing.extension.psu.edu/begfrmrs/SmlFrmDecisionMAkingWrkbk.pdf

http://www.accionusa.org/Uploads/FileManager/YMY/Business%20Plan%20Template_English.pdf
Your Guide to FSA Farm Loans 27

AgPlan

AgPlan Center for Farm Financial 

Management. Regents of the University of 

Minnesota (c)2007-2010

Available free online at:

https://www.agplan.umn.edu

Financial Record Keeping for Small Farmers 

and Ranchers

Prepared by the Rural Coalition, Rural Coalition 

member groups and Intertribal Agriculture Council in 

partnership with USDA’s Risk Management Agency

September, 2004

Available free online at:

http://indianaglink.com/financialcurriculum.html
Your Guide to FSA Farm Loans

Obtaining Assistance To Develop 

Your Business Plan

Creating a good business plan takes time and effort. 

You may want to find a business advisor who can 

help you with the process. There are many sources 

for professional advice, and it may be helpful to 

attend workshops that focus on business planning. 

Your FSA loan officer may be able to assist you 

or refer you to an advisor in your area who has 

experience in advising farmers and ranchers. The 

following are some organizations that provide 

assistance in developing business plans: • Small Business Counselors (SCORE) is a 

nonprofit organization with a network of volunteers who have experience in running 

and managing businesses. Its representatives can 

give you advice on how to create a good 

business plan.

• The USDA’s National Institute of Food and 

Agriculture administers the Extension Risk Management Education (ERME) program 

through four regional ERME Centers and a 

fifth “Digital Center.” The program’s objective 

is to educate farmers and ranchers on the full 

range of strategies to manage the risks inherent in 

agriculture, particularly production, price, 

finances, legal issues, and human resource 

management. Such strategies may include futures, 

28
Your Guide to FSA Farm Loans 29

options, agricultural trade options, crop 

insurance, cash forward contracting, debt 

reduction, product and enterprise 

diversification, farm labor management, 

and farm resources risk reduction, among 

others.

• Your local Cooperative Extension office may 

 also be able to provide you with information 

 for your operation.

Note: Contact information for FSA, SCORE, 

ERME Centers, and Cooperative Extension are 

included in Appendix A of this guide.
Your Guide to FSA Farm Loans 30

Business Plan Formats

There are many different styles of business plans. Some are written documents; 

others may be a set of worksheets that you complete. No matter what format 

you choose, several key aspects of your operation are important to consider.

Use the guidelines below to start thinking about your business plan. 

Remember, you will answer these kinds of questions in more detail when you 

create your official business plan and meet with an FSA loan officer or another 

lender to apply for a loan.

Business Plan Guidelines

1. Are you starting a new farm or ranch, or are you already in business? 

• What products do you produce?

• What is the size of your operation? 

• Is the ownership structure of your business a sole proprietorship, 

 partnership, corporation, or other type of entity? 

• What agricultural production and financial management training or 

 experience do you, your family members, or your business partners have?

• How long have you been in business? 

2. What short- and long-term goals do you have for your operation?

• How do you plan to start, expand, or change your operation? 

• What plans do you have to make your operation more efficient or 

 more profitable? 

• What type of farm or ranch model (conventional, sustainable, organic, or 

 alternative agricultural practices) do you plan to use? 
Your Guide to FSA Farm Loans 31

3. What resources do you have, or will you need, for your business?

• Is the equipment and real estate that you own or rent adequate to 

 conduct your operation? If not, how do you plan to address those needs? 

• What additional resources do you need? 

4. Do you have a support system in place?

• What help will you have operating and managing your farm or ranch? 

• What other resources, such as a mentor or community-based 

 organization, do you plan to use? 

5. Will the income you generate be sufficient to pay your operating expenses, 

living expenses, and loan payments? 

• What crops, livestock, or other products do you plan to sell? 

• How will you market your products? 

• Are the yields and prices you used to estimate your income realistic? 

• What other sources of income are available to supplement your business 

 income? 

• What business expenses will you incur? 

• What family living expenses do you pay? 

• How will you measure the success of your business?
Your Guide to FSA Farm Loans 32

How Do You Apply for a 

Guaranteed Loan?

Preparing a Guaranteed Loan 

Application

Contact your lender if you are interested in an 

FSA guaranteed loan. Your lender will assist you 

in preparing the forms needed. The forms for 

a guaranteed loan application may be obtained 

from the local FSA office or from the FSA 

website at http://forms.sc.egov.usda.gov/eForms/

welcomeAction.do?Home.

Submitting a Guaranteed Loan 

Application

Your lender will submit the guaranteed loan 

application to FSA.
Your Guide to FSA Farm Loans 33

What Happens After 

Your Lender Submits a 

Guaranteed Loan Application 

to FSA?

FSA’s Processing of the 

Guaranteed Application

After receiving the application from your lender, 

FSA will:

• review the application to determine whether all 

required forms and documents have been 

submitted and provide written notification of any 

missing items to the lender within 5 days. You 

will receive a copy of this notification.

• provide written notification to the lender within 

5 days of receiving all forms and documents that 

the application is complete.

• review the application for eligibility, repayment 

ability, security, and compliance with other 

program requirements.
Your Guide to FSA Farm Loans 34

If the Application for a Guarantee 

Is Approved

If the application for a guarantee is approved, FSA 

will provide written notification to the lender. 

Normally, your lender will schedule the loan 

closing as soon as possible after receiving approval. 

However, FSA receives funding for guarantees 

on a fiscal-year basis, and the demand for some 

guaranteed loan types may exceed the level of 

funding received. When this occurs, FSA will notify 

the lender that the guarantee is approved subject 

to the availability of funds and the loan cannot be 

closed until additional funding is received.

Note: For most loans, FSA charges the lender 

a guarantee fee of 1.5 percent of the guaranteed 

portion of the loan. The lender may pass this fee on 

to you. The fee is waived under some circumstances.
Your Guide to FSA Farm Loans 35

If the Application for a Guarantee Is 

Not Approved 

If the application for a guarantee is not approved, 

FSA will provide the lender written notification of:

• the reason it cannot be approved.

• the opportunity to request:

- reconsideration, which provides the 

 opportunity to meet with an FSA loan officer 

 to present additional information and explain 

 why FSA’s decision may be in error;

- mediation, which is a process for resolution 

 of a disagreement. A trained neutral mediator 

 assists two or more parties who disagree 

 by looking at the issues, considering all 

 available options, and attempting to have both 

 parties agree on an acceptable solution;

- an appeal to the National Appeals Division, 

 an independent organization within USDA, 

 where evidence may be presented 

 demonstrating why FSA’s decision may be 

 wrong.

• your rights if you believe you have been 

discriminated against under the Federal Equal 

Credit Opportunity Act or USDA regulations.

Note: You will receive a copy of this notification.
Your Guide to FSA Farm Loans 36

How Will Your Guaranteed 

Loan Be Serviced?

Lender Responsibilities

Lenders must supervise guaranteed loan borrowers 

in a manner similar to the supervision of their other 

agricultural loan customers. Lenders are expected to 

apply standard agricultural loan servicing principles 

to their guaranteed customers.

Your Responsibilities

As a guaranteed loan borrower, you are responsible 

for complying with all loan agreements you have 

with your lender.

FSA Responsibilities

FSA will monitor the lender’s supervision of 

guaranteed loan borrowers and will provide written 

notification of any deficiencies.
Your Guide to FSA Farm Loans 37

How Do You Apply for a 

Direct Loan?

Preparing Your Direct Loan Application

You may obtain the forms for a direct loan 

application by visiting your local office or from the 

FSA website at http://forms.sc.egov.usda.gov/eForms/

welcomeAction.do?Home. Your FSA loan officer can 

provide assistance in completing the FSA forms or 

can identify other sources of assistance in your area. 

Although it may take time to gather the information 

to prepare your application, it will save time when 

FSA is reviewing your application.
Your Guide to FSA Farm Loans 38

Form Title Description of Use

FSA-2001

Request for Direct Loan Assistance

FSA-2002

ree-year Financial History

FSA-2003

ree-Year Production History

FSA-2004

Authorization to Release Information

FSA-2005

Creditor List

FSA-2037

Farm Business Plan

Worksheet Balance Sheet

FSA-2038

Farm Business Plan

Worksheet Projected Actual Income

and Expense

FSA-2302

Description of Farm Training

and Experience

Used to obtain general information regarding your

business, and the amount and planned use of the loan

requested.

Used to gather 3 years of nancial history for your

operation.

Used to gather 3 years of production history for your

operation.

Authorizes your employers, nancial institutions, and

creditors to verify and provide FSA with your

employment, income, or other nancial information in

connection with submission of your application.

Used to gather information regarding your creditors.

Used to gather information on your assets and liabilities.

Used to gather your income and expense information.

Provides details on your farm or ranch training and

experience if you are a new applicant or are adding a

new enterprise to your operation.

A direct loan application includes the following forms and documents.
Your Guide to FSA Farm Loans 39

Additional Requirements Description of Use

Tax Returns (3 years)

Leases and Contracts

Environmental Compliance

Credit Report Fee

e income and expenses reported on your tax

returns will be used to evaluate your business

history.

Farm lease, rental agreements, or other

contracts that aect the operation of your

business.

An FSA loan ocer will help you in

determining if you have met all applicable

environmental regulations and requirements.

You will have to pay a credit report fee so FSA

can obtain your credit history. e amount of

the fee varies, depending on the structure of

your business and how many people are

applying for the loan.

Note: Additional forms and documents may be needed. Your FSA loan officer 

will advise if additional information is required.
Your Guide to FSA Farm Loans 40

Submitting Your Direct Loan Application

You may submit your application by:

• calling for an appointment with an FSA loan officer;

• mailing, faxing, or delivering your application to your local FSA office; or

• electronically submitting your application if you have registered through the 

e-gov system.

Note: For more information on submitting your application electronically, 

please visit the website http://forms.sc.egov.usda.gov/eForms/ 

welcomeAction.do?Home.
Your Guide to FSA Farm Loans 41

What Happens After You 

Submit Your Direct Loan 

Application to FSA?

FSA’s Processing of Your Direct Loan 

Application

After receiving your application, FSA will: 

• provide written notification of receipt within 

2 days. 

• review your application to determine if all 

required forms and documents have been 

submitted and notify you in writing within 10 

days if any items are missing. 

• provide written notification within 10 days of 

receiving all forms and documents that your 

application is complete.

• make a final decision on your loan application 

within 60 days of receiving all required forms and 

documents.
Your Guide to FSA Farm Loans 42

Helpful Hints: 

• In most cases, FSA will schedule a meeting 

shortly after receiving your loan application to 

discuss your request. 

• Be sure to ask questions if there is anything you 

do not understand. Your FSA loan officer will 

explain anything that you do not understand. 

FSA may provide technical assistance or refer you 

to a subject-matter expert.

• If you are not satisfied with the level of service 

that you are receiving from the local FSA office, 

you may contact the applicable FSA State 

Office or FSA National Headquarters. The 

contact numbers for these offices may be found at 

http://www.fsa.usda.gov.
Your Guide to FSA Farm Loans 43

If Your Direct Loan Is Approved

If your loan is approved, FSA will provide written 

notification of:

• the approved use of loan funds

• the interest rate

• the term of the loan

• the collateral that you will have to pledge to 

secure the loan

• when loan funds are expected to be available

• any pre-loan closing requirements

• your responsibilities as an FSA direct loan 

borrower.

You will need to sign and return the letter accepting 

the loan conditions.

Helpful Hint: Make sure you understand the loan 

conditions and your responsibilities. Contact your FSA 

loan officer if you have any questions.
Your Guide to FSA Farm Loans 44

Loan closing will be scheduled as soon as possible 

after loan approval. Normally, loan funds are 

provided within 15 days of approval. However, FSA 

receives funding for loans on a fiscal year basis, and 

the demand for some loan types may exceed the level 

of funding received. When this occurs, a loan can be 

approved subject to the availability of funding, but it 

cannot be closed until additional funding is received.

Operating loans will be closed by your FSA loan 

officer.

Farm ownership loans will be closed by an attorney 

or title agency of your choice. However, if a lien will 

be taken on tribal lands held in trust or restricted 

status, a Title Status Report and approval of the lien 

from the Bureau of Indian Affairs is required.

At closing, you will sign several documents, 

including a promissory note and lien instruments to 

secure the loan. Keep all of your loan documents, 

loan closing paperwork, and financial records 

together in a safe place so you can find them easily.
Your Guide to FSA Farm Loans 45

If Your Direct Loan Is Not Approved 

If your loan is not approved, FSA will provide 

written notification of:

• the reason your loan cannot be approved.

• your opportunity to request:

- reconsideration, which provides you with the 

 opportunity to meet with the FSA loan officer 

 to present additional information and explain 

 why you believe FSA’s decision may be 

 in error;

- mediation, which is a process for resolution of 

 a disagreement. A trained neutral mediator 

 assists two or more parties who disagree 

 by looking at the issues, considering all 

 available options, and attempting to agree on 

 an acceptable solution;

- an appeal to the National Appeals Division, 

 an independent organization within USDA, 

 where you may present evidence which 

 demonstrates why you believe that FSA’s 

 decision may be wrong.

• your rights if you believe you have been 

discriminated against under the Federal Equal 

Credit Opportunity Act or USDA regulations.
Your Guide to FSA Farm Loans 46

Note: If your loan is not approved, your FSA loan officer may be able to advise 

you of potential actions or alternatives that might help resolve the issues that 

resulted in the denial of your loan request. 
Your Guide to FSA Farm Loans 47

What Are Your 

Responsibilities as a Direct 

Loan Borrower?

After you receive your loan, it is your responsibility 

to:

• follow the business plan on which your loan was 

based; it is your blueprint for success.

• always pay your loan on time. If you cannot 

make payments to suppliers, other creditors, 

or FSA on time, contact your FSA loan officer 

immediately to discuss loan servicing options that 

may be available to assist you.

• keep good business records that include all:

- farm operating and family living expenses.

- income from crops, livestock, and other 

 sources.
Your Guide to FSA Farm Loans 48 • maintain loan security, which includes: - keeping livestock safe, healthy, and well fed. - maintaining all real estate, buildings, and 

 machinery. - paying insurance, real estate taxes, and other 

 taxes when due. - not placing any additional liens or 

 encumbrances on the property that you 

 pledged as collateral to secure your loan 

 without first getting FSA’s permission. • attend any required production and/or financial 

management skills training.

• talk with your FSA loan officer to change your 

business plan: - if you need to make expenditures outside the 

 business plan or need to change it for any 

 reason. - if you plan to sell any portion of your crop 

 and/or livestock in a different way than 

 described in your business plan. - when you propose to sell or trade any 

 equipment. • have checks you receive from buyers made jointly 

payable to you and FSA. (FSA will release these 

proceeds to you in accordance with your business 

plan.)
Your Guide to FSA Farm Loans 49

What Credit Supervision 

Does FSA Provide to Direct 

Loan Borrowers?

FSA will provide oversight, technical assistance, 

and management expertise to assist in various 

ways to help you succeed while also protecting the 

Government’s interest. 

Year-End Analyses

At the end of each business cycle, your FSA loan 

officer will make an appointment with you to:

• review your records;

• help you plan for the following year’s operation, 

including determining if additional loan 

assistance is needed from FSA; and

• help you review your business plan and make any 

changes.

Chattel Checks

During the year, FSA officials may make periodic 

reviews or “chattel checks” to look at crops, 

equipment, and livestock that you have pledged 

as security or collateral for your loan. FSA will 

also work with you to account for your livestock, 

equipment, and other collateral and to make sure
Your Guide to FSA Farm Loans 50

that the livestock are healthy and equipment is in 

good repair.

Normal Income Security

Normal income security is the crops and livestock 

that you produce on your farm or ranch that FSA 

financed. The income from the sale of this security 

can be released to you in accordance with your 

business plan.

Basic Security

Basic security refers to real estate, equipment, 

machinery, and foundation and breeder livestock, 

herds, and flocks that secure your loan. This 

property must be maintained and kept in good repair 

throughout the term of the loan. It is also very 

important that you do not sell or trade any of this 

security property without discussing it first with your 

local FSA office.

Graduating to Commercial Credit

FSA provides temporary credit to assist farmers or 

ranchers when they cannot get commercial loans. 

When you make sufficient financial progress to 

operate without FSA assistance, you will be asked 

to graduate by refinancing your FSA loans with a 

commercial lender. This can be accomplished with 

or without an FSA guarantee on the commercial 

loan. 
Your Guide to FSA Farm Loans 51

What Loan Servicing Options 

Will Be Available to Direct 

Loan Borrowers?

If it appears that you will not be able to make a 

scheduled payment, or you become delinquent on 

your FSA loan, FSA offers servicing options to help 

avoid or resolve delinquency.

Disaster Set-Aside (DSA)

Under certain circumstances, FSA can move one 

annual payment to the end of your loan if you are 

not able to make the payment on schedule. This 

set-aside payment will include the unpaid interest 

and any principal due for that payment. Interest 

will accrue on any principal portion of the setaside at the same rate charged on the balance of the 

loan. This benefit is available only in disaster areas 

designated by the President, Secretary of Agriculture, 

or FSA Administrator. FSA will inform you of the 

availability of a disaster set-aside by mail and through 

news releases if your county is designated.
Your Guide to FSA Farm Loans 52

Example: Sarah Thompson believes that she will not be 

able to make all her scheduled payments, and she sees an 

announcement in the paper that her county received a 

disaster designation. She can go to the local FSA office 

and inquire about applications for both emergency 

loans and DSA, even if she has not yet received her DSA 

announcement directly from FSA. An FSA loan officer 

can assist her in determining if she qualifies for an 

emergency loan and DSA. 

Primary Loan Servicing (PLS) for 

Financially Distressed and Delinquent 

Borrowers

If you are not able to make your payment or you 

become delinquent on your loan, you may want to 

be considered for PLS. Under this program, your 

loan may be restructured if your inability to make 

your payment is due to circumstances beyond your 

control. Debt write-down may be considered in 

restructuring your loan if you are delinquent.

If you apply for PLS and cannot develop a plan that 

shows you can repay your existing debt, you may 

pay FSA the lower of the current market value of the 

loan collateral or the full amount you owe. If you 

are unable to pay the lower of these two amounts, 

then FSA will be required to move ahead with debt 

collection by declaring the entire debt due
Your Guide to FSA Farm Loans 53

and payable (acceleration) and eventually selling 

the property you pledged as collateral. During 

this process, FSA may offset any eligible Federal 

payments from USDA or other Government sources, 

which will be credited to your account.

PLS is used instead of DSA for more severe 

delinquencies or when the operation needs more 

long-term relief. FSA will notify you of the 

availability of PLS when you become more than 

90 days past due on your payments. It is very 

important that you read the notice carefully and 

provide a servicing application to FSA within 60 

days. Contact FSA if there is anything that you do 

not understand or if you need assistance completing 

your application.

Example: David Jones was a little over 3 months 

late on his FSA loan payments due to adverse weather 

conditions and a crop failure last year. He received 

notification in the mail from his local FSA office 

advising him of available loan servicing options that 

must be requested within 60 days of his receipt of the 

notification. The forms he needs in order to apply were 

included with the notification. He may want to make 

an appointment with the FSA office or get help from 

a financial or legal professional. If he applies for loan 

servicing, FSA may be able to restructure his annual 

payments to better match his operation. If he does
Your Guide to FSA Farm Loans 54

not make his payment or apply for loan servicing, he 

will be notified of his right to request reconsideration, 

mediation, and/or appeal. If these options do not result 

in a resolution, the Government will move to offset any 

payments or refunds he is to receive, accelerate (declare 

his loans due and payable), and sell his loan security.
Your Guide to FSA Farm Loans 55

How Do You Apply for a Land 

Contract Guarantee?

Preparing a Land Contract Guarantee 

Application

You may obtain the forms for a land contract 

guarantee application by visiting your local offi ce or 

from the FSA website at 

http://forms.sc.egov.usda.gov/eForms/welcomeAction.do?Home.

You will need to complete most of the application 

forms; however, there is one form that will need to 

be completed by the seller. Your FSA loan offi cer can 

provide assistance in completing the FSA forms or 

can identify other sources of assistance in your area. 
Your Guide to FSA Farm Loans 56

Submitting a Land Contract Guarantee 

Application

You or the seller can submit the land contract 

application to FSA by:

• calling for an appointment with an FSA loan 

officer;

• mailing, faxing, or delivering your application to 

your local FSA office; or

• electronically submitting your application if you 

have registered through the e-gov system.

Note: For more information on submitting 

your application electronically, please visit 

the website http://forms.sc.egov.usda.gov/eForms/ 

welcomeAction.do?Home.
Your Guide to FSA Farm Loans 57

What Happens After You 

or the Seller Submits a 

Land Contract Guarantee 

Application?

FSA’s Processing of the Land Contract 

Guarantee Application

After receiving your application, FSA will: 

• review your application to determine if all 

required forms and documents have been 

submitted and notify you and the seller in writing 

within 10 days if any items are missing. 

• provide written notification to you and the seller 

after receiving all forms and documents that your 

application is complete.

If the Application for a Land Contract 

Guarantee Is Approved

If the application for a land contract guarantee is 

approved, FSA will arrange for the guarantee to be 

signed by you, the seller, and the escrow or servicing 

agent. 
Your Guide to FSA Farm Loans 58

If the Application for a Land Contract 

Guarantee Is Not Approved 

If the application for a land contract guarantee is not 

approved, FSA will provide you and the seller written 

notification of:

• the reason it cannot be approved.

• the opportunity to request:

- reconsideration, which provides you with the 

 opportunity to meet with an FSA loan officer 

 to present additional information and explain 

 why you believe FSA’s decision may be 

 in error;

- mediation, which is a process for resolution 

 of a disagreement. A trained neutral mediator 

 assists two or more parties who disagree 

 by looking at the issues, considering all 

 available options, and attempting to agree 

 on an acceptable solution;

- an appeal to the National Appeals Division, 

 an independent organization within USDA, 

 where you may present evidence which 

 demonstrates why you believe that FSA’s 

 decision may be wrong.

• your rights if you believe you have been 

discriminated against under the Federal Equal 

Credit Opportunity Act or USDA regulations.
Your Guide to FSA Farm Loans 59

How Will Your Land Contract 

Guarantee Be Serviced?

Escrow or Servicing Agent 

Responsibilities

The escrow or servicing agent will handle 

transactions relating to the land contract between the 

buyer and the seller, including receiving payments 

from the buyer and sending them to the seller. 

Your Responsibilities

You are responsible for complying with the terms of 

the land contract and guarantee agreements. 
Your Guide to FSA Farm Loans 60

Special Considerations for American 

Indian/Alaskan Native Producers and/or 

Any Producer Utilizing Land Held in Trust 

by the Bureau of Indian Affairs

If you are considering utilizing land held in trust by the United States 

Government, through the U.S. Department of the Interior’s Bureau of Indian 

Affairs (BIA), this arrangement should be discussed with the appropriate BIA 

staff. This includes American Indian producers who wish to potentially utilize 

allotted trust land as collateral to secure their loan, any producer who would 

lease trust land as part of an agricultural operation, or any producer who will 

enter into a contract with a tribe to operate an agricultural operation. To 

determine whether this is applicable, you should utilize the contact information 

and website below. 

Bureau of Indian Affairs

Mailing Address:

Bureau of Indian Affairs

MS-4606

1849 C Street, N.W.

Washington, D.C. 20240

Website: http://www.bia.gov/

Telephone: (202) 208-5116

Telefax: (202) 208-6334
Your Guide to FSA Farm Loans 61

Appendix A: Resources and Contact 

Information

USDA Agencies

Agricultural Marketing Service (AMS)

Website: http://www.ams.usda.gov

AMS facilitates the strategic marketing of agricultural products in domestic 

and international markets while ensuring fair trading practices and promoting 

a competitive and efficient marketplace. AMS constantly works to develop new 

marketing services to increase customer satisfaction. 

Agricultural Research Service (ARS)

Website: http://www.ars.usda.gov

ARS is USDA’s principal in-house research agency. ARS leads America towards 

a better future through agricultural research and information. 

Animal and Plant Health Inspection Service (APHIS) 

Website: http://www.aphis.usda.gov

APHIS provides leadership in ensuring the health and care of animals and 

plants. The agency improves agricultural productivity and competitiveness and 

contributes to the national economy and the public health.
Your Guide to FSA Farm Loans 62

Center for Nutrition Policy and Promotion (CNPP)

Website: http://www.cnpp.usda.gov

CNPP works to improve the health and well-being of Americans by developing 

and promoting dietary guidance that links scientific research to the nutrition 

needs of consumers. 

Economic Research Service (ERS)

Website: http://www.ers.usda.gov

ERS is USDA’s principal social science research agency. Each year, ERS 

communicates research results and socioeconomic indicators via briefings, 

analyses for policymakers and their staffs, market analysis updates, and major 

reports.

Farm Service Agency (FSA)

Website: http://www.fsa.usda.gov

The Farm Service Agency implements agricultural policy; administers credit 

and loan programs; and manages conservation, commodity, disaster, and farm 

marketing programs through a national network of offices. 
Your Guide to FSA Farm Loans 63

Food and Nutrition Service (FNS)

Website: http://www.fns.usda.gov

FNS increases food security and reduces hunger in partnership with 

cooperating organizations by providing children and low-income people access 

to food, a healthy diet, and nutrition education in a manner that supports 

American agriculture and inspires public confidence. 

Food Safety and Inspection Service (FSIS)

Website: http://www.fsis.usda.gov

FSIS enhances public health and well-being by protecting the public from 

foodborne illness and ensuring that the Nation’s meat, poultry, and egg 

products are safe, wholesome, and correctly packaged. 

Foreign Agricultural Service (FAS) 

Website: http://www.fas.usda.gov

FAS works to improve foreign market access for U.S. products. This USDA 

agency operates programs designed to build new markets and improve the 

competitive position of U.S. agriculture in the global marketplace.

Forest Service (FS) 

Website: http://www.fs.usda.gov

FS sustains the health, diversity, and productivity of the Nation’s forests and 

grasslands to meet the needs of present and future generations. 
Your Guide to FSA Farm Loans

Grain Inspection, Packers, and Stockyards Administration (GIPSA) 

Website: http://www.gipsa.usda.gov

GIPSA facilitates the marketing of livestock, poultry, meat, cereals, oilseeds, 

and related agricultural products. It also promotes fair and competitive trading 

practices for the overall benefit of consumers and American agriculture. GIPSA 

ensures open and competitive markets for livestock, poultry, and meat by 

investigating and monitoring industry trade practices.

National Agricultural Library (NAL) 

Website: http://www.nal.usda.gov

NAL ensures and enhances access to agricultural information for a better 

quality of life. 

National Agricultural Statistics Service (NASS) 

Website: http://www.nass.usda.gov

NASS serves the basic agricultural and rural data needs of the country by 

providing objective, important, and accurate statistical information and services 

to farmers, ranchers, agribusinesses, and public officials. This data is vital to 

monitoring the ever-changing agricultural sector and carrying out farm policy. 

National Institute of Food and Agriculture (NIFA)

Website: http://www.nifa.usda.gov

NIFA’s unique mission is to advance knowledge for agriculture, the 

environment, human health and well-being, and communities by supporting

64
Your Guide to FSA Farm Loans 65

research, education, and extension programs in the Land-Grant University 

System and other partner organizations. NIFA does not perform actual 

research, education, and extension, but rather helps fund it at the State and 

local level and provides program leadership in these areas.

Natural Resources Conservation Service (NRCS) 

Website: http://www.nrcs.usda.gov

NRCS provides leadership in a partnership effort to help people conserve, 

maintain, and improve our natural resources and environment. 

Risk Management Agency (RMA) 

Website: http://www.rma.usda.gov

RMA helps to ensure that farmers have the financial tools necessary to manage 

their agricultural risks. RMA provides coverage through the Federal Crop 

Insurance Corporation, which promotes national welfare by improving the 

economic stability of agriculture. 

Rural Development (RD) 

Website: http://www.rurdev.usda.gov

RD helps rural areas to develop and grow by offering Federal assistance that 

improves quality of life. RD targets communities in need and then empowers 

them with financial and technical resources.
Your Guide to FSA Farm Loans

Online Resources

Start2Farm.gov

Website: http://www.Start2Farm.gov

Start2Farm.gov is an online database connecting beginning farmers and 

ranchers with available programs and resources created by USDA’s National 

Agricultural Library, in partnership with the American Farm Bureau Federation.

Note: Start2Farm.gov is for reference only and does not represent the opinions 

of FSA, nor does FSA endorse any specific commercial product. There may 

be other products, programs, and services available that could better meet the 

specific needs of individual farmers and ranchers.

Other Organizations

Cooperative Extension System Offices

Website: http://www.nifa.usda.gov

Each U.S. State and territory has a Cooperative Extension State office at its 

land-grant university and a network of local or regional offices. These offices are 

staffed by one or more experts who provide useful, practical, and research-based 

information to agricultural producers, small business owners, youth, consumers, 

and others in rural areas and communities of all sizes.

66
Your Guide to FSA Farm Loans

Small Business Counselors (SCORE)

Website: http://www.score.org

SCORE, a nonprofi t organization, is a network of volunteers who provide 

resources to help entrepreneurs start, grow, and succeed in their business. 

SCORE operates through 364 chapters located throughout the United States 

and provides confi dential business counseling services at no charge.

Extension Risk Management Education (ERME) Centers

Website: http://www.nifa.usda.gov/nea/economics/in_focus/farm_if_risk.html

Th e four regional ERME centers provide funds on a competitive basis to 

extension educators and farm management consultants who have the expertise 

to develop and deliver risk mitigation materials to agricultural producers. Th e 

Digital Center serves as the clearinghouse for risk management material and 

provides risk management curricula, information, tools, and assistance through 

an online resource called the National Ag Risk Education Library.

Additional Resources for American Indians/Alaskan Natives

Intertribal Agriculture Council (IAC)

Website: http://www.indianaglink.com

Th e Intertribal Agriculture Council pursues and promotes conservation, 

development, and use of agricultural resources for the betterment of American 

Indians/Alaskan Natives.

67
Your Guide to FSA Farm Loans

IAC Regional Technical Assistance Program Offices

Website: http://www.iactechhelp.com/regions

Through assistance from USDA’s Office of Tribal Relations, the Intertribal 

Agriculture Council has established IAC Regional Technical Assistance Program 

Offices. These regional offices provide technical assistance and outreach to 

Indian producers and tribes. They provide guidance through the regulations 

and processes of Federal agencies and:

• teach intensive financial, business, and marketing planning skills and 

understanding of basic and advanced farm and ranch business management 

skills to American Indian/Alaskan Native farmers and ranchers;

• teach leasing requirements for tribal trust and restricted lands to American 

Indian/Alaskan Native farmers and ranchers in coordination with the 

Bureau of Indian Affairs; and

• support the deployment of tribal agriculture advocates and technical 

assistance providers in key locations throughout Indian Country, who will 

serve alongside consolidated sub-offices at tribal headquarters, tribal 

agriculture USDA liaisons, third-party regional employees, and others.

Indian Land Tenure Foundation

Website: http://www.iltf.org

The Indian Land Tenure Foundation is a community-based nonprofit 

organization focused on the recovery, management, and control of American 

Indian lands by Indian people. They work with Indian people, Indian 

organizations, tribal communities, tribal governments, and others connected to 

Indian land issues.

68
Your Guide to FSA Farm Loans 69

Indian Land Working Group

Website: http://indianlandworkinggroup.org

The Indian Land Working Group is dedicated to the restoration and recovery of 

the native land base and the control, use, and management of this land base by 

tribal communities.

Note: The information describing these organizations was obtained primarily 

from their websites.
Your Guide to FSA Farm Loans 70

Appendix B: Definition of Terms

Assets: Property owned by a person, both tangible (for example, land, 

buildings, vehicles) and intangible (for example, training, experience).

Default: The failure of a borrower to observe any agreement with the agency, 

or the lender in the case of a guaranteed loan, as contained in promissory notes, 

security instruments, and similar or related instruments.

Escrow Agent: A third-party agent selected by a seller who has obtained 

a prompt payment guarantee under the Land Contract Guarantee Program. 

Escrow agents must be bonded and may include title insurance companies, 

attorneys, financial institutions, or any fiscally responsible institution as 

determined and approved by FSA.

Family farm: A farm or ranch that produces agricultural commodities for 

sale in sufficient quantities so that it is recognized as a farm or ranch rather 

than a rural residence. Both physical labor and management are provided by 

the borrower, entity member, or family members. Hired labor may be used to 

supplement family labor, such as temporary labor for seasonal peak workloads.

Foreclosure: The act of selling security by a lender, either under the power 

of sale in the security instrument or through judicial proceedings.
Your Guide to FSA Farm Loans 71

Land Contract: An installment contract between a buyer and a seller for 

the sale of real property, in which complete ownership of the property is not 

transferred until all payments under the contract have been made.

Liabilities: Debts that a person or business owes.

Lien: A legally enforceable claim against real or chattel property of another 

obtained as security for the repayment of indebtedness, or an encumbrance on 

property to enforce payment of an obligation.

Promissory note: A written agreement to pay a specified sum on demand 

or at a specified time to the party designated.

Security instrument: Any document giving the agency a security interest 

on real or personal property.

Servicing Agent: A third-party agent selected by a seller who has obtained 

a standard guarantee under the Land Contract Guarantee Program. Servicing 

agents must be bonded commercial lending institutions or similar entities that 

are registered and authorized to provide escrow and collection services in the 

State in which the real estate is located.
Your Guide to FSA Farm Loans 72

This booklet is modeled on a guide that was originally developed by the New 

Entry Sustainable Farming Project, Northeast Network of Immigrant Farming 

Projects, in September 2007. That guide was authored by Vanessa Bitterman 

and reviewed by Jennifer Hashley, New Entry Sustainable Farming Project 

Director, and David DeFreest, FSA Loan Officer, Westford, MA.
June 2012

FSA-BR-01

The U.S. Department of Agriculture (USDA) prohibits discrimination in all its programs and activities on the 

basis of race, color, national origin, age, disability, and where applicable, sex, marital status, familial status, 

parental status, religion, sexual orientation, genetic information, political beliefs, reprisal, or because all or 

part of an individual's income is derived from any public assistance program. (Not all prohibited bases 

apply to all programs.) Persons with disabilities who require alternative means for communication of 

program information (Braille, large print, audiotape, etc.) should contact USDA's TARGET Center at

(202) 720-2600 (voice and TDD). To file a complaint of discrimination, write to USDA, Assistant Secretary 

for Civil Rights, Office of the Assistant Secretary for Civil Rights, 1400 Independence Avenue, S.W., 

Stop 9410, Washington, DC 20250-9410, or call toll-free at (866) 632-9992 (English) or 

(800) 877-8339 (TDD) or (866) 377-8642 (English Federal-relay) or (800) 845-6136 (Spanish Federal-relay). 

USDA is an equal opportunity provider and employer.