USDA changes farm loan requirements to increase equity |

USDA changes farm loan requirements to increase equity

The Agriculture Department on Tuesday made changes to its farm loan programs to make it easier for current borrowers, including historically underserved producers, to participate in the program.

“USDA remains committed to examining barriers faced by all borrowers, especially those in economic distress, new and beginning, socially disadvantaged or otherwise underserved producers,” said Zach Ducheneaux, administrator of USDA’s Farm Service Agency. “We recognize loan making and servicing activities are critical for producers, especially in tough times. This improvement to our farm loan programs recognizes the needs of producers and more importantly enacts equitable relief provisions to ensure they get a fair shake.”

Ducheneaux noted that FSA has added flexibilities to assist certain direct loan borrowers who are non-compliant with program requirements due to good faith reliance on a material action of, advice of, or non-action from an FSA official. Previously, borrowers may have been required to immediately repay the loan or convert it to a non-program loan with higher interest rates, less favorable terms, and limited loan servicing.

Now, FSA has additional flexibilities to assist borrowers in such situations, Ducheneaux said. If the agency provided incorrect guidance to an existing direct loan borrower, the agency may provide equitable relief to that borrower. FSA may assist the borrower by allowing the borrower to keep their loans at current rates or other terms received in association with the loan which was determined to be noncompliant or the borrower may receive other equitable relief for the loan as the agency determines to be appropriate.


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