In February, the United States Department of Agriculture’s Farm Service Agency announced a new program ñ the Land Contract Guarantee Program ñ to assist ranchers and farmers just starting out.To qualify for the program, applicants must have a minimum level of agricultural experience but not more than 10 years of experience operating a farm or ranch.Tight commercial credit, minimal credit history and the lack of collateral make it difficult for many new ranchers and farmers to get a commercial business loan to buy the land they need.The new program guarantees a portion of a seller-financed land purchase when the buyer is just beginning as a rancher or farmer. There are two types of guarantees: one that guarantees up to three annual installment payments on the contract and one that guarantees 90 percent of the unpaid principal of the contract.Guarantees can be used in the purchase of land for up to $500,000.The FSA also announced a change to its lending rules for new producers to allow more flexibility in its minimum experience requirement.Under the new rule, FSA loan officers are now allowed to consider all prior farming experience, including on-the-job training and formal education when determining eligibility for FSA Farm Operating and Ownership Loans.Visit USDA Web site ñ http://start2farm.gov ñ to learn more about USDA and FSA programs for new farmers and ranchers.
