The Department of Agriculture on Tuesday made changes to its agricultural loan programs to make it easier for current borrowers, including historically underserved producers, to participate in the program.
“The USDA remains committed to addressing the barriers faced by all borrowers, especially those in economic difficulty, new and beginning producers, socially disadvantaged, or otherwise underserved,” said Zach Ducheneaux, Administrator of the Farm Service Agency of the USDA. “We recognize that lending and servicing activities are essential for producers, especially in difficult times. This enhancement to our agricultural loan programs recognizes the needs of producers and, more importantly, enacts fair relief provisions to ensure they receive a fair share.
Ducheneaux noted that the FSA has added flexibilities to help certain direct borrowers who fail to comply with program requirements due to good faith reliance on material action, advice or inaction by an FSA official. Previously, borrowers could be required to repay the loan immediately or convert it to a non-program loan with higher interest rates, less favorable terms and limited loan service.
Now the FSA has additional flexibilities to help borrowers in such situations, Ducheneaux said. If the agency provided incorrect advice to an existing direct loan borrower, the agency may award equitable relief to that borrower. The FSA may assist the borrower by allowing them to retain their loans at the current rates or other terms received in association with the loan that has been found to be non-compliant or the borrower may receive other equitable relief for the loan that the FSA may agency deems appropriate.