USDA's Farm Service Agency Announces Guaranteed Loan Limit Increases
November 07, 2011
BAY MINETTE, Ala. — Daniel Robinson, state executive director for USDA's Farm Service Agency in Alabama announced that effective Saturday, the loan limit for FSA's 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). The one-time loan origination fee charged on FSA guaranteed loans will also increase, from 1.0 percent to 1.5 percent of the guaranteed portion of the loan, for loans obligated after Oct. 1, 2011.
"The increased limit will enhance the Agency's ability to meet the credit needs of farmers and ranchers throughout the Country," said Robinson.
The Guaranteed Loan Program allows commercial and farm credit lenders to extend credit to qualified applicants, who otherwise would not meet their standard lending criteria. Participating lenders can use the Guaranteed Loan Program to strengthen a loan's viability through a guarantee of up to 95 percent of the loan amount. Farmers interested in guaranteed loans should apply through a conventional lender.
FSA also offers the Direct Loan Program as an alternative for those unable to obtain financing from commercial credit sources. Direct farm loans are government-funded, and made by FSA. The loan limit for loans under the Direct Program is $300,000 (except for Emergency Loans), increasing the maximum combined guaranteed and direct farm loan indebtedness to $1,514,000.
Submitted by Emily Ryan, Baldwin County Farm Service Agency
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