FSA’s Direct Farm Operating Loans are a valuable resource to start, maintain and strengthen a farm or ranch. For new agricultural producers, FSA’s Direct Farm Operating Loans provide an essential gateway into agricultural production by financing the cost of operating a farm. With a maximum loan amount of $400,000, all FSA Direct Operating Loans are financed and serviced by the Agency through local Farm Loan Officers and Farm Loan Managers. The funding comes from Congressional appropriations as part of the USDA budget.
There are 2 different types of qualifications which need to be met:
- eligible farm enterprise
- general eligibility requirements
First, the operation must be an eligible farm enterprise. Operating loan funds cannot be used to finance nonfarm enterprises, such as exotic birds, tropical fish, dogs or horses used for non-farm purposes (racing, pleasure, show and boarding).
General eligibility requirements include:
- not having Federal or State conviction(s) for planting, cultivating, growing, producing, harvesting, storing, trafficking, or possession of controlled substances
- the legal ability to accept responsibility for the loan obligation
- an acceptable credit history
- be a United States citizen, non-citizen national or legal resident alien of the United States, including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, and certain former Pacific Trust Territories
- no previous debt forgiveness by the Agency, including a guarantee loan loss payment
- being unable to obtain sufficient credit elsewhere, with or without an FSA loan guarantee
- no delinquency on a Federal debt, other than IRS tax debt, at the time of loan closing
- not being ineligible due to disqualification resulting from a Federal Crop Insurance violation
- have sufficient managerial ability to assure a reasonable expectation of loan repayment
Website link: https://www.fsa.usda.gov/programs-and-services/farm-loan-programs/farm-operating-loans/index