What are the Requirements for a FSA Loan?

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Plants growing from money, symbolizing growth potential with FSA Loan assistance

How Does the FSA Determine Loan Eligibility?

The Farm Service Agency (FSA) offers a variety of loan programs to help farmers and ranchers access the capital they need to start, expand, or sustain their agricultural operations. To qualify for an FSA loan, applicants must meet a set of general eligibility requirements, which are outlined below.

General Eligibility Requirements for an FSA Loan

Applicants for FSA loans must:

  1. Legal and Citizenship Status:
    • Be a U.S. citizen, non-citizen national, or legal resident alien, including residents of Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, and certain former Pacific Trust Territories.
  2. Credit and Financial Standing:
    • Have an acceptable credit history as determined by the FSA.
    • Be unable to obtain sufficient credit elsewhere, with or without an FSA loan guarantee.
    • Not be delinquent on any federal debt (excluding IRS tax debt) at the time of loan closing.
  3. Legal Responsibility:
    • Have the legal capacity to accept responsibility for the loan obligation.
    • Not have provided false or misleading information to the FSA in the past.
  4. Controlled Substance Convictions:
    • Not have federal or state convictions related to controlled substances within the last five crop years.
  5. Debt Forgiveness:
    • Not have received debt forgiveness from the FSA, except under specific circumstances.
  6. Farm Management Experience:
    • Demonstrate sufficient farm managerial experience through education, on-the-job training, or general farm experience. For some loans (e.g., Direct Farm Ownership Loans), applicants must have participated in farm operations for at least three of the past ten years.
  7. Family Farm Requirement:
    • Agree to operate as an owner-operator of a family farm after loan closing.
  8. Federal Crop Insurance Compliance:
    • Not be disqualified due to violations of federal crop insurance regulations.

Does graduating from AiSA meet the farm management requirement for an FSA Loan?

To fulfill the farm management experience requirement, applicants can leverage formal education programs tailored to agricultural management. One such program is AiSA’s Organic Agribusiness initiative in partnership with the University of Minnesota Crookston (UMN Crookston). This program provides specialized agricultural education that equips participants with the knowledge and skills needed to meet FSA’s managerial experience criteria. By completing programs like AiSA, applicants can enhance their qualifications and demonstrate their ability to manage a farm effectively—an essential component for securing an FSA loan. For more information on specific FSA loan types and additional requirements, applicants are encouraged to contact their local FSA office or visit the USDA’s official website.

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