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Have Three Or More Years Farm Experience? You May Qualify For An FSA Loan.

Posted by on July 30, 2021

The U.S. Department of Agriculture (USDA) Farm Service Agency (FSA) offers Guaranteed loans to farmers and ranchers to promote, build and sustain family farms for a thriving agricultural economy. Agricultural producers can apply for a Guaranteed loan through FSA-approved commercial lenders.

FSA Guaranteed loans are made and serviced by commercial lenders, such as banks, Farm Credit System institutions, or credit unions. FSA guarantees up to 95 percent of the loss of principal and interest on a loan. Farmers and ranchers apply to an agricultural lender, which then arranges for the guarantee. The FSA guarantee permits lenders to make agricultural credit available to farmers who do not meet the lender’s normal underwriting criteria.

FSA Guaranteed loans are for both farm ownership and farm operating purposes. FSA guarantees loans up to $1,776,000 (amount adjusted annually based on inflation).

You Don’t Have To Be An Active Farmer Or Rancher To Qualify

Other than needing an acceptable credit history, you only need to have three years of farm employment out of the past ten years. The most important qualification is that you purchase a property that is or can sustain a working farm:

1.) The farm, plus any other dependable income, will provide enough money to meet payment obligations and pay living expenses.
2.) The farm will produce and sell enough agricultural commodities so that the local community would consider it a commercial farming operation, rather than a rural residence or subsistence operation.
3.) The applicant must manage the farm and the applicant and his or her family must provide a substantial amount of the labor required for the operation.

Have A Marketing Plan

The easiest way to assure success with a federal farm loan, is to have a well designed plan in mind. Find a crop or livestock animal that you would be able to farm on Maui and generate a consistent amount of product to support an annual budget. There are many crops that grow particularly well on Maui. Avocados, bell peppers, potatoes, papaya, guava, lilikoi, white pineapple, oranges, mandarin oranges, lemons, limes, coffee, macadamia nuts and alfalfa are among the major crops grown and traded on Maui. Cattle is the most common livestock on Maui and Maui is known for raising premium beef.

Farm Loan Discovery Tool

Answer a few short questions to learn about USDA farm loans that might be right for you. USDA also offers other funding opportunities to help farmers, ranchers, and forest landowners finance their business. Click below to see what kinds of FSA loans you may qualify for.

Contact Hawaii Elite Real Estate today to see what land and/or farms are available for purchase, and for any other of your Maui real estate needs.

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