The United States Department of Agriculture (USDA) has announced that almost $130 million in automatic financial assistance has been obligated for eligible farm loan program borrowers who are facing financial risk.
USDA provides nearly $130M in financial assistance to mitigate financial risk for distressed farm loan borrowers
The funding was provided under Section 22006 of the Inflation Reduction Act (IRA), which made available $3.1 billion to help distressed farm loan borrowers. Since the act was signed by President Biden in August 2022, the USDA has provided nearly $1.1 billion in immediate assistance to over 20,000 distressed borrowers.
According to Agriculture Secretary Tom Vilsack, the USDA is working hard to provide vulnerable producers with the opportunity to generate long-term stability and success. He emphasized that the agency’s goal is to provide producers with access to the tools they need to help get back to a financially viable path and ultimately succeed as thriving agricultural businesses.
The automatic payments went to Farm Service Agency (FSA) direct loan borrowers whose interest exceeded the principal owed on outstanding debts. They also included borrowers who had a balance up to 60 days past due as of Sept. 30, 2022, and remained delinquent. Borrowers with a recent restructure between Feb. 28, 2020, through March 27, 2023, or who had accepted an offer to restructure on or before March 27, 2023, but had not yet closed that restructure were also eligible for assistance.
The FSA will begin accepting and reviewing individual distressed borrower assistance requests from direct loan borrowers who missed a recent installment or are unable to make their next scheduled installment
All FSA borrowers should have received a letter detailing the process for seeking this type of assistance even before they become delinquent. Borrowers who are within two months of their next installment may seek a cashflow analysis from FSA using a recent balance sheet and operating plan to determine their eligibility.
FSA borrowers who took certain extraordinary measures to avoid delinquency on their loans, such as taking on or refinancing more debt, selling property, or cashing out retirement or college savings accounts, will also receive a letter detailing a new opportunity to receive assistance. The FSA plans to begin working through these types of cases in May. USDA will provide regular updates on its progress in deploying this funding to farmers who need it.
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