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Farm Ownership Loans

With FSA’s Direct Farm Ownership Loans, “we keep America’s agriculture growing.“

Farm Ownership Loans use up to one hundred percent financing and are an important resource to assist farmers and ranchers purchase or increase the size of household farms, enhance and broaden current operations, boost agricultural performance, and assist with land period to conserve farmland for future generations. With an optimum loan quantity of $600,000 ($ 300,150 for Beginning Farmer Down Payment), all FSA Direct Farm Ownership Loans are financed and serviced by the Agency through local Farm Loan Officers and Farm Loan Managers. The funding originates from Congressional appropriations as part of the USDA budget plan.

Fact Sheet: Farm Loans Overview (PDF, 807 KB).
Direct Loan Making Handbook 3-FLP (PDF, 2.5 MB).
National Agrability Project.
Farm Answers Library.
Farmers.gov.
Frequently Asked Questions

FSA’s Direct Farm Ownership loans are utilized to:

- purchase a farm or cattle ranch.
- increase the size of an existing farm or cattle ranch.
- make a deposit on a farm.
- purchase of easements.
- construct, purchase or enhance farm homes, service buildings or other facilities and improvements necessary to the farm operation.
- promote soil and water conservation and security.
- pay loan closing expenses.
There are 3 kinds of Direct Farm Ownership Loans: “routine,” joint funding, and deposit depending upon private requirements. FSA also uses a Direct Farm Ownership Microloan for smaller sized financial requirements.

Direct Farm Ownership Joint Financing Loan

Also called a participation loan, joint funding permits FSA to offer more farmers and ranchers with access to capital. FSA lends approximately half of the expense or value of the residential or commercial property being acquired. An industrial lending institution, a State program, or the seller of the farm or ranch being acquired supplies the balance of loan funds, with or without an FSA warranty.

Direct Farm Ownership Deposit Loan

Available only to eligible beginning farmers and ranchers and/or minority and ladies applicants, a Deposit loan is an unique type of Direct Farm Ownership loan program that partly funds the purchase of a household size farm or ranch. Beginning farmers do not have to recognize themselves as a minority or woman, and minority and women loan candidates do not need to be starting farmers.

The Down Payment Farm Ownership loan is the only loan program that does not offer 100 percent funding. Down Payment loans require loan candidates to supply a minimum money deposit of 5 percent of the purchase cost of the farm.

As established by the Beginning Farmer definition, loan applicants interested in the Down Payment loan might not own more than 30 percent of the typical size farm at the time of the application. The candidate might go beyond the 30 percent after the loan is closed. The most current Census of Agriculture data is used in this calculation.

The optimum loan amount for a “regular” Direct Farm Ownership loan is $600,000. The optimum loan quantity for a Joint Financing or Participation Farm Ownership loan is $600,000.

Direct Farm Ownership Deposit optimum loan quantity works differently. The optimum loan quantity under this loan program will not go beyond 45 percent of whichever is the lesser amount of:

- the purchase rate