The Minority and Women Farmers and Ranchers Loans, administered by the Farm Service Agency (FSA), are designed to assist socially disadvantaged groups, including minority and women farmers and ranchers, in starting, expanding, and maintaining their agricultural operations. The program aims to provide equal access to credit and remove barriers that may have previously prevented these groups from entering or succeeding in the agricultural industry.
Loans to historically underserved and women farmers and ranchers are not a special type of loan program or loan type. Rather, this designation refers to a specific funding source known as Socially Disadvantaged Applicant (SDA) funding. To be considered for targeted funding, loan applicants must voluntarily provide race, ethnicity, and gender information.
You do not have to choose between identifying as an historically underserved individual or a beginning farmer, nor is there a "benefit" of deciding between one designation over the other. Identifying yourself as an historically underserved beginning farmer loan applicant is completely acceptable.
Eligible applicants include socially disadvantaged farmers and ranchers who are members of a group subjected to racial, ethnic, or gender prejudice. This includes but is not limited to African Americans, American Indians, Alaskan Natives, Hispanics, Asians, Pacific Islanders, and women.
Applicants must demonstrate the ability to repay the loan and meet specific criteria depending on the type of loan they are applying for.
To apply for Minority and Women Farmers and Ranchers Loans, applicants must submit a loan application to their local FSA office. The application process includes providing documentation of the applicant’s eligibility, a farm business plan, and other required financial information. Detailed enrollment instructions and deadlines are available through the local FSA office.
Loan Types
- Direct Operating Loans: Used for essential operating expenses such as equipment, seed, feed, and other farm needs.
- Direct Farm Ownership Loans: Used to purchase farmland, construct buildings, and make farm improvements.
- Guaranteed Loans: Issued by commercial lenders but guaranteed by the FSA, reducing the lender's risk.
Loan Amounts
- Direct Operating Loans: Up to $400,000.
- Direct Farm Ownership Loans: Up to $600,000.
- Guaranteed Loans: Up to $1,825,000.
Interest Rates and Terms: Competitive interest rates with flexible repayment terms. Operating loans typically have terms of 1 to 7 years, while ownership loans can have terms up to 40 years.
The Direct Farm Ownership Down Payment loan is the only loan program specifically for historically underserved and women farmers and beginning farmers. Down Payment loan funds may be used only to partially finance the purchase of a family farm. Loan applicants must contribute a minimum downpayment of 5 percent of the purchase price of the farm and the Agency will finance 45 percent to a maximum loan amount of $300,000. The balance of the purchase price not covered by the down payment loan and the loan applicant's down payment may be financed by a commercial lender, private lender, a cooperative, or the seller.