Steven Maurer, State Executive Director for Ohio’s Farm Service Agency (FSA), announced that the loan limit for the Guaranteed Loan Program will increase to $1,214,000. The limit is adjusted annually based on the “Prices Paid to Farmers Index,” compiled by the National Agricultural Statistics Service (NASS).
“Raising the guaranteed loan limit will allow FSA to better meet the financial needs of producers across the state,” said Maurer. Another change to the guaranteed loan program will affect the one-time loan guarantee fee charged on all FSA loans obligated after October 1, 2011. The one-time loan guarantee fee will increase from 1.0 percent to 1.5 percent of the guaranteed portion of the loan.
FSA guaranteed loans allow lenders to provide agricultural credit to farmers who do not meet the lender’s normal underwriting criteria. Farmers apply for a guaranteed loan through a commercial lender, and the lender arranges for the guarantee. FSA can guarantee up to 95% of the loss of principal and interest on a loan. Guaranteed loans can be used for both farm ownership and operating purposes.
Producers who are unable to obtain financing through a commercial lender, including a guaranteed loan, could be eligible for an FSA direct loan. These loans are made by FSA with government funds and the limit is $300,000 (except for Emergency Loans which have a limit of $500,000). The maximum combined guaranteed and direct farm loan indebtedness is now $1,514,000.
For detailed information on loan eligibility or the different loan programs available, contact your local FSA office to setup an appointment with a Loan Approval Official.