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FSA offering targeted loans for underserved, beginning farmers

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USDA Tennessee Farm Service Agency 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  FSA Acting Executive Director, Tyeisha Samples.
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, Native Americans 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.
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.
Farm operating loan funds may be used to purchase livestock, poultry, farm equipment, fertilizer and other materials necessary to operate a successful farm.
Operating loan funds can also be used for family living expenses, refinancing debts under certain conditions, paying salaries for hired farm laborers, installing or improving water systems for home, livestock or irrigation use and other similar improvements.
Beginning producers must meet the eligibility requirements outlined for direct or guaranteed loans. Additionally, individuals and all entity members must have operated a farm for less than 10 years. Applicants must materially or substantially participate in the operation.
For more information on FSA’s farm loan programs and targeted underserved and beginning farmer guidelines, contact the Kingston Service Center at 424 N. Kentucky St., or call 376-2392, Ext. 3.