Emergency Loans

The Farm Service Agency (FSA) offers direct and guaranteed loans to farmers and ranchers to promote, build, and sustain family farms for a thriving agricultural economy. The goal of FSA's farm loan program is to provide supervised credit and manageme

FSA provides emergency loans to help producers recover from production and physical losses due to drought, flooding, other natural disasters, or quarantine. The emergency loan program is designed to assist farming operations by improving their financial viability which will allow them to return to private sources of credit as soon as possible. Applications for emergency loans must be received within eight months of the county's disaster or quarantine designation date.

General Eligibility for Emergency Loans Emergency loans may be made to farmers and ranchers who: I. Own or operate land located in a county declared by the President or designated by the Secretary of Agriculture as a primary disaster area or quarantine area. All counties contiguous to the declared, designated, or quarantined primary counties also are eligible for emergency loans. A disaster designation by the FSA Administrator authorizes emergency loan assistance for physical losses only in the designated and contiguous counties; II. Are established family farm operators and have sufficient farming or ranching experience; III. Are citizens or permanent residents of the United States; IV. Have suffered at least a 30 percent loss in crop production or a physical loss to livestock, livestock products, real estate, or chattel property; V. Have an acceptable credit history; VI. Are unable to receive credit from commercial sources; VII. Can provide collateral to secure the loan; and VIII. Have repayment ability

Individual/Entity, Socially Disadvantaged (SDA)/Non-SDA; SDA applicant or farmer is an individual or entity who is a member of a socially disadvantaged group. SDA group is a group whose members have been subject to racial, ethnic, or gender prejudice because of their identity as members of a group without regard to their individual qualities. These groups consist of: American Indians or Alaskan Natives, Asians, Blacks or African Americans, Native Hawaiians or other Pacific Islanders, Hispanics, and women.

Emergency loan funds may be used to: I. Restore or replace essential property; II. Pay all or part of production costs associated with the disaster year; III. Pay essential family living expenses; IV. Reorganize the farming operation; and V. Refinance certain debts.

Loans for crop, livestock, and non-real estate losses are normally repaid within one to seven years, depending on the loan purpose, repayment ability, and collateral available as loan security. In special circumstances, terms of up to 20 years may be authorized. Loans for physical losses to real estate are normally repaid within 30 years. In certain circumstances, repayment may be made over a maximum of 40 years.

No loan will be made until all Federal and state statutory and regulatory environmental requirements have been complied with.

If an emergency loan is approved, FSA will notify the applicant in writing of: 1. the approved use of loan funds 2. the interest rate 3. the term of the loan 4. the collateral that will be required to pledge to secure the loan 5. when the money is expected to be available 6. any pre-loan closing requirements 7. Responsibilities as an FSA direct loan borrower. The applicant will need to sign and return the letter accepting the loan conditions. Loan closing will be scheduled as soon as possible after loan approval. Normally, loan funds are provided within 15 days of approval. If the application for a guarantee is approved, FSA will provide written notification to the lender. FSA receives funding for loans and guarantees on a fiscal year basis, and the demand for some loan types may exceed the level of funding received. When this occurs, a loan can be approved subject to the availability of funding, but it cannot be closed until additional funding is received.

Within 60 calendar days after receiving a complete loan application, the Agency will complete the processing of the Direct loan request and notify the applicant of the decision reached, and the reason for any disapproval.

Applicants may reapply for an FSA loan at any time. Applicants who were given a denial of a loan request will be advised of potential actions or alternatives that might resolve or help resolve the issues that resulted in the denial of the loan request. Applicants previously given a loan denial must establish that substantial change has occurred, since the denial decision.

FLP applicants and borrowers have the right to request reconsideration, file appeals, and enter into alternate dispute resolutions about adverse decisions. If a loan is not approved, FSA will provide written notification of opportunities to request: Reconsideration Applicants are provided with the opportunity to meet with the FSA loan officer to present additional information and explain why you believe FSA's decision may be in error; Mediation A process for resolution of a disagreement. A trained neutral mediator assists two or more parties who disagree by looking at the issues, considering all available options, and attempting to agree on an acceptable solution; Appeal to the Department of Agriculture National Appeal Division (NAD) An independent organization within USDA, where you may present evidence which demonstrates why you believe that FSA's decision may be wrong.