Hello friends,
The Farm Service Agency is again accepting guaranteed loan applications for conservation loans. The funding is for guaranteed conservation loans, not for direct conservation loans.
The goal of the FSA conservation loan program is to provide access to credit for farmers who need and want to implement conservation measures on their land but do not have the upfront funds available to implement these practices. The guaranteed conservation loan program is a partnership between the Farm Service Agency, the Natural Resources Conservation Service, and lenders to assist with implementing conservation practices.
What’s eligible
The conservation loan funds will be used to implement practices that reduce soil erosion, improve water quality, or promote sustainable agricultural practices. Eligible practices include installing conservation structures, installation of water conservation measures, the establishment or improvement of permanent pastures, and manure management.
Manure management can include projects such as manure storage structures, manure digesters, and other manure handling improvements to reduce runoff. The pasture improvements can include fencing to implement rotational grazing, development and installation of watering systems, and other pasture improvements such as fencing off woodlands or streams.
Practices that are included in the NRCS conservation plan can be included in the conservation loan. Applicants will need to work with the NRCS staff to develop a conservation plan. The conservation plan is a written record of the conservation practices to be implemented,. Conservation practices must be approved by NRCS before the Farm Service Agency can provide any financing.
Loan details
The guaranteed conservation loan limitation is $1,214,000. Conservation loans are available by applying with lenders who are working with FSA to obtain a guarantee. The conservation loan term can be up to 20 years for real estate improvement projects and will depend on the loan security offered.
The loan must be fully secured and can only be approved for those who have the ability to repay the loan. The Farm Service Agency guaranteed loan general eligibility requirements apply to guaranteed conservation loans with the exception of the test for credit elsewhere and the limitation of a family sized farm.
The family sized farm limitation has been removed for conservation loans to permit FSA to provide loan assistance to some farm applicants who may have larger farm operations and whose farm operation is financially strong to assist in implementing conservation practices.
The application process for a conservation loan can be started with your local lender who is participating in the FSA guaranteed loan program. There is a streamlined application process for applicants with a strong financial position who are current on all payments, have a debt to asset ratio of 40% or less, a minimum FICO score of 700, and have a net worth of at least 3 times the requested loan amount.
For more information on the Guaranteed Conservation loan program, contact your local FSA office to set up an appointment with a loan approval official. Or visit the FSA website at www.fsa.usda.gov for more information.
That’s all for now,
FSA Andy
