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Farm Service Agency

U.S. DEPARTMENT OF AGRICULTURE

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# Youth Loans

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- Youth Loans

FSA makes loans to individual young persons to start and operate income-producing projects of modest size in connection with their participation in 4-H clubs, FFA, a Tribal youth group, or similar agricultural youth organization. The project being financed with an FSA Youth Loan needs to provide an opportunity for the young person to acquire experience and education in agriculture-related skills.

The Youth Loan application requires a recommendation from a project advisor who verifies that he/she will sponsor the loan applicant, has the correct training and experience to supervise your project, and is available to help whenever needed.

If you are between the ages of 10 and 20 years at the time of loan closing, parent(s) and/or legal guardian(s) must consent to the loan application. Young people applying for a Youth Loan are personally responsible for repaying the loan. A co-signer is required only if the project shows possible difficulty in repaying the loan or does not meet security requirements.

## Resources

                                -  Fact Sheet: Youth Loans  (PDF, 737 KB)
                                - Farm Answers

## Application Forms*

**All FSA direct loan applications require the same basic forms. When you meet with your FSA county Farm Loan Program staff, you may be asked to complete additional forms based on applicable loan program requirements for the loan type.*

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**Loan Purposes**

Youth loan funds must be used only to pay the expenses associated with an approved project.
                            - Buy livestock, seed, equipment and supplies
                            - Buy, rent or repair needed tools and equipment
                            - Pay operating expenses for the project

**Project Requirements**

The approved project to be financed must:
                            - be able to produce sufficient income to repay the loan amount plus accrued interest in full;
                            - be related to agriculture;
                            - be educational;
                            - be part of an organized and supervised program
                            - not be a noneligible enterprise.

**Applicant Eligibility Requirements**

In addition to the items listed for project requirements, Youth loan applicants also must:
                            - be a United States citizen, non-citizen national, or qualified legal alien;
                            - have no controlled substance convictions;
                            - have no past due debt problems;
                            - have not caused the Government a financial loss on previous loan assistance;
                            - have not received debt forgiveness from FSA.

**Noneligible Enterprises**

Youth loan funds may not finance:
                            - exotic animals, birds, or fish not normally associated with agricultural production
                            - non-farm animals, birds, or fish ordinarily used for pets, companionship, or pleasure
                            - market or process farm products, goods or services not produced by the youth loan applicant, even if it might be agriculturally related

**Maximum Loan Amount**

The maximum loan amount is $5,000. There is no minimum loan amount requirement.

**Repayment Terms**

Repayment periods vary from 1 to 7 years. The length of the loan depends upon the amount of the loan, the loan purpose, and the project.

**Interest Rate**

Youth loans accrue at the same interest rate as the Direct Operating loan rate. Loan applicants receive the advantage of always being charged the lower rate in effect at the time of loan approval or loan closing. Interest rates are calculated and posted the 1st of each month.

**Additional Information**

We encourage you to contact your local office or USDA Service Center to learn more about our programs and the information you will need for a complete application. You also should be able to find a listing in the telephone directory in the section set aside for governmental/public organizations under the U.S. Department of Agriculture, Farm Service Agency. Our local FSA offices are happy to help you.

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Farm Service Agency

U.S. DEPARTMENT OF AGRICULTURE

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