FSA approves and obligates the loan. Loan is closed, and the loan applicant receives the funds. FSA reviews loan for eligibility, repayment ability, security, and compliance with other regulations. FSA approves and obligates loan. Lender receives conditional commitment indicating funds have been set aside, and loan may be closed.
Lender closes loan, and farmer receives funds.
FSA issues guarantee. In addition to meeting the eligibility criteria, the loan applicant must have a satisfactory credit history, demonstrate repayment ability, and provide sufficient security for the loan. Repayment terms and interest rates vary according to the type of loan made, the collateral securing the loan, and your ability to repay. Operating Loans are normally repaid within 7 years and Farm Ownership Loans cannot exceed 40 years. The interest rates for Direct Loans are set periodically based on the Government's cost of borrowing.