USDA is making $67 million available to help landowners struggling with heirs’ property resolve ownership and succession issues.

The money for the competitive loans will go to “intermediary lenders” that are certified as community development financial institutions “and have experience and capability in making and servicing agricultural and commercial loans that are similar in nature,” USDA said.

Although heirs’ property issues have mostly been identified as affecting African American farmers, Agriculture Secretary Tom Vilsack said on a call with reporters Thursday that Native American and Hispanic farmers are also impacted.

“While those affected are in all geographic and cultural areas, many Black farmers and other groups who have experienced historic discrimination have inherited heirs’ property,” Vilsack said. “USDA is committed to revising policies to be more equitable and examining barriers faced by heirs’ property owners is part of that effort. This helps ensure that we protect the legacy of these family farms for generations to come.”

Heirs’ property "is a legal term that refers to family land inherited without a will or legal documentation of ownership,” USDA said. “It has historically been challenging for heirs to benefit from USDA programs because of the belief that they cannot get a farm number without proof of ownership or control of land.” 

The Farm Service Agency “considers heirs’ property to be land that has been passed down to subsequent generations via intestate succession (that is, without a will) or via a will that divides real estate assets equally among all heirs,” says an advance copy of an FSA rule released today.

“When a landowner dies without a last will and testament or estate plan, state law determines which heirs or classes of family members inherit the land of the deceased, and the ownership share for each heir,” FSA says. “This form of property ownership results in the land being owned in common by all heirs-at-law, each of which owns a fractional interest in the land.”

Without clear title to the land, owners who farm and pay taxes on the land are prevented “from gaining access to the legal, financial, and managerial transactions needed to effectively manage the land,” the rule says.

The relending program was authorized in the 2018 farm bill, but Vilsack said the “majority of the work” on the program was begun and completed since the advent of the Biden administration.

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Sen. Raphael Warnock, D-Ga., said told reporters “it’s well past time for the federal government” to address the issue, which may affect as much as one-third of Black farmers in the South. The number of Black farmers nationwide has fallen from more than 900,000 in 1920 to less than 50,000 today.

“If applications exceed the amount of available funds, those applicants with at least 10 years or more of experience with socially disadvantaged farmers that are located in states that have adopted a statute consisting of enactment or adoption of the Uniform Partition of Heirs Property Act (UPHPA) will receive first preference,” USDA said.

Those states include Alabama, Arkansas, California, Connecticut, Florida, Georgia, Hawaii, Iowa, Illinois, Mississippi, Missouri, Montana, Nevada, New Mexico, New York, Rhode Island, Texas, South Carolina, and the Virgin Islands.

“Selected intermediary lenders will determine the rates, terms, and payment structure for loans to heirs,” USDA said. “Interest rates will be the lowest rate sufficient for intermediaries to cover cost of operating and sustaining the loan.”

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