FSA guaranteed loans are for both Farm Ownership and Operating purposes.
- Be a citizen of the United States (or legal resident alien), which includes Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, and certain former Pacific Trust Territories.
- Have an acceptable credit history as determined by the lender.
- Have the legal capacity to incur the obligations of the loan.
- Be unable to obtain a loan without a guarantee.
- Not have caused FSA a loss by receiving debt forgiveness on more than 3 occasions on or prior to April 4, 1996; or any occasion after April 4, 1996.
- Be the owner or tenant operator of a family farm after the loan is closed. For an OL, the producer must be the operator of a family farm after the loan is closed. For an FO loan, the producer needs to also own the farm.
- Not delinquent on any Federal debt.
- The Borrower and Valley will complete the guaranteed application and submit it to FSA.
- FSA reviews the application for eligibility, repayment ability, security, and compliance with other regulations.
- FSA approves and obligates the loan.
- Valley receives a conditional commitment indicating funds have been set aside, and the loan may be closed.
- The lender closes the loan and advances funds to the producer.
- FSA issues the guarantee.
The Borrower works with Valley; Valley works directly with FSA.
Since Valley is a Preferred Lender with FSA, this process takes 20 days or less, subject to any real estate appraisals that might be required.
- Has not operated a farm or ranch for than 10 years
- Does not own a farm or ranch greater than 30 percent of the median size farm in the county as determined by the most current Census for Agriculture
- Meets the loan eligibility requirements of the program to which he/she is applying
- Substantially participates in the operation
Valley participates in the Beginning Farmer Program with FSA to help farmers purchase their first property. This program is attractive since it only requires that the Borrower contributes 10% of the project cost. Valley will provide 50% of the purchase with an FSA loan guarantee subject of conventional rates and farms. FSA will provide the 40% portion secured by a 2nd Trust Deed up to $300,000. This loan can be amortized for 20-40 years at a fixed interest rate of 3.125%.
|10% – Down Payment from Borrower||$70,000|
|50% – Valley||350,000|
|40% – FSA||280,000|
|Total Project Cost||$700,000|