# Farmland Loans for the Young farmers



## Vol (Jul 5, 2009)

Heres info from the USDA on farmland loans for young farmers and others;

Resources Available for Land Purchases | AGWEB.com

Regards, Mike


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## steve IN (Jan 13, 2010)

I woul recomend any young person to use the FSA programs as much as possible. I have used them and yes the paperwork is time consuming and at times burdensome but the fixed interest is unbelievably low. The right loan officer helps also. Thier is one woman in Indy who tries to be a witch(being polite here) every chance she gets but the loan officer is the key. Communication with them is first and foremost. I would be willing to answer any questions for a young guy who needs help. hate to think of a world full of farmers with silver spoons stuck in each end of thier bodies. Most of my lanlords already know if something happens to me I have a young guy for them to consider .


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## NDVA HAYMAN (Nov 24, 2009)

It is a very good program that will help you get a jumpstart into farming. I have helped someone get a loan with this program. They ask enough questions and require enough info to make you look hard at what you want to do and where you are going. Mike


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## Vol (Jul 5, 2009)

Steve and Mike, your posts are great to read. I think it is just terrific that you two fellas have taken the time to be an "Ag Mentor". We need more men like you fellas in the Ag industry.

Best Regards, Mike


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## CockrellHillFarms (Aug 30, 2011)

Two things I dont understand about this article. One, I think there are a few things that have been left out of the requirements for this loan. I remember reading the qualifications last year because I was looking into this loan. I believe your off the farm income cant exceed your on the farm income. I will have to call to see what exactly that means. Gross or net. I guess numbers can be made to look how you need them to be read but thats a scary thought. Basically, if the farm is going under, you cant run out and get a job off the farm to keep it going. 2ndly, I dont want this to seem like its headed in the wrong direction but............why are there special stipulations for the "non-traditional" farmer. If the traditional farm family is what built the farming community, why aren't they the ones that should get special consideration. Point being, our family has owned our main farm for over 160+ yrs. It would make more sense to me that someone in the game that long should get an easier go at it than a guy thats gonna walk in off the street. Buy up some land, brand new equipment, and in 2-3 yrs go under. Thats what I dont understand. That's the sort of thing that got us in the economical mess we are working out of.


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## Vol (Jul 5, 2009)

CockrellHillFarms said:


> 2ndly, I dont want this to seem like its headed in the wrong direction but............why are there special stipulations for the "non-traditional" farmer.


Cockrell, it all started several years ago in what is termed the Pigford vs. Glickman lawsuit or the Black farmer lawsuit. Where it was proven beyond doubt that certain Black farmers and want to be Black farmers were discriminated against by certain employees of the USDA. The Black farmer won his lawsuit which resulted in an avalanche of minority lawsuits against the USDA.(More discrimination in agriculture | Harvest Public Media) Tom Vilsack has done an admirable job of trying to rectify a wrong that could have had a terrible long term affect on our USDA and the future of all Ag programs.

Regards, Mike


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## CockrellHillFarms (Aug 30, 2011)

I must have missed that one. That makes sense Vol. Thanks for the info. One other thing that I didnt understand now that I'm thinking about it and you guys might be able to explain this to me. It was stated in that article that some old farmers/land lords were scared of getting their farm back if the buyer defaulted on the loan. (thats how I read it). Why would they get it back? Wouldnt it go to the bank. My understanding which is prob a rough one is this. When you apply for this type of USDA loan, it is processed by FCS (in my case). They send it out to banks, then the banks can choose if they would like to pick up that loan. So you might get 3 takers or you might get one. Point being, its a loan through a bank. If you default on it, then it would be bank owned. ???????????? wouldnt it? The only time I could see this not being the case is when you make a deal with the land owner directly and you take out a loan to pay them off. But the bank would still own something of yours, prob the land to repay the debt as collateral.


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## Vol (Jul 5, 2009)

Cockrell, It is my understanding that this is a program that is basically between the seller and the buyer....with up to 3 years of payment and interest guaranteed by usda in case the buyer gets a little behind.....usda steps in and makes the payment to the seller thus alleviating some of the seller worries and helps the buyer through troubled waters without the threat of foreclosure. There is also a provision to guarantee 90% of the contract but I am not clear on how that works exactly.

Regards, Mike


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## NDVA HAYMAN (Nov 24, 2009)

The deal that I helped with was an operating loan and not a land loan. This kid came from a farming background and wanted to start with a herd of cattle. It was funded strictly thru FSA and USDA. It's been quite some time ago and I am not familiar with the requirements to buy land. I don't think you will see the average kid walk off the street and start farming. It's kinda got to be in your blood. The one most important thing that I liked about it was that the farmer had to have a rock solid plan of how he was going to repay the loan and that made them look at this more as a business. I guess all of this is about as clear as mud. Mike


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## steve IN (Jan 13, 2010)

I bought my parents farm with a guaranteed loan through my local bank. This gave me an interest rate break of about a point. How it works is the bank makes the loan using thier normal criteria. The FSA guarantees 90% of the loan. If I default then the FSA gives the bank a check for 90% of the loan balance. The FSA then steps in and forecloses and sells the farm. The bank gets the other 10% of the loan and the farmer gets the balance ,if any, less fees and penalties. Since , in my case the bank required 20% cash down it was a no brainer. Ther is a certain amount of paperwork each year but it gets easier each year I make my payments and I have had a good rapport with ny banker and my FSA officer. I helped a young man who has worked for me off and on for years get his loan last year and I will do whatever it takes to help him and his wife succeed. I am also helping another local "kid" with his paperwork. Its nice to see the strong work ethic in these kids eyes. Reminds me alot of mw when me and my ex wife started out. People wh earn thier way are usually alot moere appreciative.


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