Farmers Have Higher Loan Limits in New Farm Bill

Higher limits are now available for borrowers interested in USDA’s farm loans, which help agricultural producers buy farms or cover operating expenses.

The 2018 Farm Bill increased the amount that producers can borrow through direct and guaranteed loans available through USDA’s Farm Service Agency (FSA) and made changes to other loans, such as microloans and emergency loans.

“As natural disasters, trade disruptions, and persistent pressure on commodity prices continue to impact agricultural operations, farm loans become increasingly important to farmers and ranchers,” FSA Administrator Richard Fordyce said. “The 2018 Farm Bill provides increased loan limits and more flexibility to farm loans, which gives producers more access to credit when they need it most.”

The Direct Operating loan limit increased from $300,000 to $400,000. The Direct Farm Ownership loan limit increased from $300,000 to $600,000. The Guaranteed Operating loan, as well as the Guaranteed Farm Ownership limit, increased from $1.429 million to $1.75 million.

The Fed reported that despite ongoing demand for farm loans and adjustments to lending portfolios, delinquency rates have remained low. Interest rates on farm loans continued to rise. Farm real estate values remained relatively steady through 2018.

Source: USDA, Fed