January 1, 2009

Loans for socially disadvantaged persons

USDA News Release

The Farm Service Agency (FSA) can make direct and guarantee loans to socially disadvantage applicants to buy and operate family-size farms and ranches. Funds specifically for these loans are reserved each year. A socially disadvantaged applicant is one of a group whose members have been subjected to racial, ethnic, or gender prejudice because of his or her identity as members of the group without regard to his or her individual qualities. For purposes of this program, socially disadvantaged groups are women, African Americans, American Indians, Alaskan Natives, Hispanics, Asian Americans and Pacific Islanders. Direct loans may be made to applicants by FSA for both farm operating and farm ownership loans. Guaranteed farm loans also may be made for ownership or operating purposes, and may be made by any lending institution subject to federal or state supervision (e.g., banks and units of the Farm Credit System) and guaranteed by FSA. FSA typically guarantees 90 or 95 percent of a loan against any loss that might be incurred if the loan fails. Persons who are primarily and directly engaged in farming and ranching on family-size operations may apply.

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