USDA is taking additional steps to provide relief to historically underserved farmers and other producers holding direct loans from the Farm Service Agency.

The flexibilities will apply to both operating loans and loans provided to purchase land and equipment.

If the agency provided incorrect guidance on a direct loan, FSA may allow the borrower to keep their current rates on loans that are determined to be noncompliant. The borrowers also can receive other relief “as the agency determines to be appropriate,” USDA said in a press release.

“We recognize loan making and servicing activities are critical for producers, especially in tough times,” said FSA Administrator Zach Ducheneaux. “This improvement to our farm loan programs recognizes the needs of producers and more importantly enacts equitable relief provisions to ensure they get a fair shake.”   

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USDA says the change was authorized by the 2018 farm bill for borrowers who relied in good faith on advice or actions by FSA.

Without the change, borrowers can be required to immediately repay a noncompliant loan or convert it to a non-program loan that will have higher interest rates, less favorable terms and limited loan servicing.  

Previous changes USDA has made under the 2018 farm bill include easing the existing three-year farming experience requirement for direct farm ownership loans to allow other types of experience to count. USDA also now allows socially disadvantaged and beginning farmers to receive guarantees for up to 95%, compared to the 90% limit for other borrowers. 

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