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MAINE — USDA Maine Farm Service Agency/State Executive Director Donovan E. Todd III reminds producers that FSA offers targeted farm ownership and farm operating loans to assist underserved applicants as well as beginning farmers and ranchers.
“Each year, a portion of FSA’s loan funds are set aside to lend to targeted underserved and beginning farmers and ranchers,” said Todd. “Farming and livestock production are capital-intensive business ventures, and FSA is committed to helping producers start, expand and maintain their agricultural operations.”
USDA defines underserved applicants as a group whose members have been subjected to racial, ethnic or gender prejudice because of their identity as members of the group without regard to their individual qualities. For farm loan program purposes, targeted underserved groups are women, African Americans, American Indians and Alaskan Natives, Hispanics and Asians and Pacific Islanders.
Underserved or beginning farmers and ranchers who cannot obtain commercial credit from a bank can apply for either FSA direct loans or guaranteed loans. Direct loans are made to applicants by FSA. Guaranteed loans are made by lending institutions who arrange for FSA to guarantee the loan. FSA can guarantee up to 95 percent of the loss of principal and interest on a loan. The FSA guarantee allows lenders to make agricultural credit available to producers who do not meet the lender’s normal underwriting criteria.
“During fiscal year 2016, Maine FSA obligated $5.7 million in loans to assist 88 targeted underserved and beginning producers,” Todd said.
The direct and guaranteed loan program provides for two types of loans: farm ownership loans and farm operating loans.
Farm ownership loan funds may be used to purchase or enlarge a farm or ranch, purchase easements or rights of way needed in the farm’s operation, build or improve buildings such as a dwelling or barn, promote soil and water conservation and development and pay closing costs.
