Provisions |
1996-2001 farm legislation |
2002 Farm Bill |
FSA
farm loan programs. The Secretary can make or guarantee
real estate loans, operating, and emergency loans to family-sized
farms unable to obtain sufficient credit elsewhere on
reasonable terms. |
Provisions were waived through 2002 that had prevented
borrowers from qualifying for new guaranteed operating
loans after receiving either direct or guaranteed operating
loans for a period of 15 years, and from qualifying
for new direct operating loans after 7 years. |
Eligibility time limits on guaranteed operating loans
are waived through 2006. Borrowers with direct operating
loans are eligible, case-by-case, for a one-time waiver
for 2 additional years of eligibility. Native Americans
whose farms or ranches are within the jurisdiction of
an Indian Reservation may be exempt from eligibility
limits on direct operating loans and also become eligible
for 95% guarantees on operating loans instead of a 90%
guarantee. USDA and State, county, or area committee
employees become eligible for FSA farm loans.
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Borrower must have owned or operated a farm or ranch
for at least 3 years to be eligible for a direct farm
ownership loan.
Use of direct farm ownership loans to refinance commercial
debt was prohibited. |
Borrowers must
have participated in the operation of a farm or ranch
for at least 3 years to be eligible for a direct farm
ownership loan. Refinancing of commercial debt is allowed
for direct farm ownership loans if the debt was incurred
for a farm purchase while waiting for funding of an approved
farm ownership loan application. |
Borrowers who had received FSA debt forgiveness under
certain procedures may have been eligible for further
direct or guaranteed loans, but only for annual operating
expenses. |
Borrowers having received debt forgiveness may also
be eligible for new direct or guaranteed operating loans
if forgiveness resulted from a declared major emergency
or natural disaster. Beside areas designated as natural
disasters, low-interest emergency loans are also available
in areas under plant or animal quarantines. |
A 4% interest-rate
reduction was available annually on up to $490 million
of guaranteed operating loans through 2002. |
A 4% interest-rate
reduction program for guaranteed operating loans is made
permanent, with 15% of the $750 million in annual authority
set aside for beginning farmers until March 1 of each
fiscal year. |
FSA
loans to beginning farmers |
A limit
on the amount of acreage beginning farmers could
own and be eligible for farm ownership loans was
set at 25% of the county median. Beginning farmers
were eligible for farm purchase downpayment loans
at 4% fixed
rates for 10 years in amounts equal to the lesser
of 30% of the sale price or of the appraised value.
Farm property obtained by FSA was held for sale to
beginning farmers for 75 days before being
sold to others. |
Acreage limit increases to 30% of county median for
beginning farmers to be eligible for farm ownership
loans. Beginning farmer downpayment loans at 4% fixed
rates can be made for up to 15 years in amounts equal
to the lesser of 40% of the sale price or of the appraised
value.
Beginning farmers have preference to buy FSA inventory
farm property for 135 days before it is sold to others.
Inventory properties are to be divided or combined to
make them more suitable for these borrowers. |
No similar provisions. |
Pilot program
allows FSA to guarantee up to 5 owner-provided loans (land
contracts for sale) per year through 2006 to beginning
farmers purchasing a farm or ranch in at least 5 geographically
diverse States. |
No similar provisions. |
FSA may guarantee
loans made under State beginning farmer loan programs
that use small-issue agricultural bonds. (A change in
the tax code is still required.) |
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Annual loan program authorization levels were set at
$85 million for direct farm ownership loans, $500 million
for direct operating loans, $750 million for guaranteed
farm ownership loans, and $2.1 billion for guaranteed
operating loans. |
Annual loan program authorization
levels set at $205 million for direct farm ownership loans,
$565 million for direct operating loans, $1 billion for
guaranteed farm ownership loans, and $2 billion for guaranteed
operating loans. |
Other FSA provisions |
No similar provisions. |
County committee involvement on farm loan decisions
and procedures is reduced. A greater number of FSA employees
provided the authority to handle farm loan decisions,
provided they receive appropriate training. |
Lower documentation
was required from lenders requesting loan guarantees in
amounts up to $50,000. |
Low-documentation
procedures are available to lenders requesting loan guarantees
in amounts up to $125,000. |
Secretary was to
report to Congress on demand for and availability of credit
in rural areas for agriculture, housing, and rural development.
Study was to analyze how well the Farm Credit System,
commercial banks, and Federal agencies fulfill rural credit
demand. |
Secretary is to
undertake 2 1-year studies on FSA direct and guaranteed
lending programs, reporting to Congress on effectiveness
of the programs in meeting the credit needs of agricultural
producers in an efficient and fiscally responsible manner. |
