USDA releases final $300 million in aid for distressed farm loan borrowers

DIXON – The U.S. Department of Agriculture has announced the final round of about $300 million in aid for more than 12,800 distressed Farm Loan Program borrowers under the Inflation Reduction Act.

Over the past two years, the USDA has helped more than 47,800 distressed borrowers keep their land and continue their agricultural operations by providing about $2.5 billion in assistance.

The $300 million will help pay off delinquencies and outstanding loans, including:

• $168.5 million for delinquencies on qualifying direct and guaranteed loans.
• $67.3 million for direct loan installments due for borrowers who received prior assistance.
• $35 million for restructuring loans.
• $9 million for outstanding direct emergency loans
• additional funding for interest, protective advances and other loan-related expenses.

“USDA has always been committed to standing by our nation’s farmers and ranchers, especially in their most challenging times,” Agriculture Secretary Tom Vilsack said. “The final round of payments announced today under President [Joe] Biden’s Inflation Reduction Act provides much-needed relief to more than 12,800 producers, helping them stay on their land and continue farming. At USDA, we are not only addressing immediate financial challenges but also working every day to build a stronger, more supportive loan system that ensures farmers have the tools they need to succeed now and into the future.”

FLP payment eligibility is determined on a loan-by-loan basis. Borrowers may qualify for multiple categories of assistance, with the option that provides the greatest payment amount being applied. Qualified borrowers currently in bankruptcy will be reviewed on a case-by-case basis.

Any remaining funds will be applied to the borrower’s next loan installment on a prorated basis that is not to exceed the remaining balance.

Eligible FLP direct loan borrowers also can take advantage of the Distressed Borrower Set-Aside program, which allows them to postpone up to one full loan installment on certain loans with a reduced interest rate of 0.125%.

The USDA also has introduced several improvements to its loan programs, including simplified applications, online tools for loan repayment and personalized support for distressed farmers through the Enhancing Program Access and Delivery for Farm Loans rule.

• The Loan Assistance Tool helps customers identify direct loan products that might match their business needs by providing an interactive online guide with step-by-step assistance to understanding the application process.
• The Online Loan Application is a paperless, guided application option that allows applicants to attach supporting documents such as tax returns, construct a farm operations plan and complete a balance sheet.
• The Distressed Borrowers Assistance Network is a national campaign connecting financially distressed borrowers with personalized financial assistance.
• Farm loan resources and videos are available through a new educational hub.

For more information, visit fsa.usda.gov.