December 2006
Each year Congress appropriates money for FSA farm loans as part of the USDA budget. The funds are appropriated for the Government's fiscal year, which runs from October 1 until September 30 of the following year. The amount of money appropriated by Congress does not always meet the demand for loan funds and the Agency may run out of money for some programs.
Each year, when FSA receives loan money in the budget, every State receives an allocation of money from the Agency. So, one State can deplete its funds and be out of money while other States are still funding loans.
When funds in a loan program start to run low and many States are out of money, the Agency will usually pool funds. Pooling means taking all of the unused loan money from the States and placing it in a National Headquarters pool. By pooling, FSA is able to move money from areas where it is not being used to areas where it is needed. If there is enough left, the money will be redistributed to States. If there isn't much left, the money will be held at the national office, and States can request funding on a loan-by-loan basis. Pooling of unused loan funds most commonly happens in the spring.
Congress may pass a supplemental appropriations bill to make additional money available. If Congress does not appropriate additional money, loans cannot be funded until the next fiscal year when new appropriations become available.
The Agency allocates money based upon the potential need for it. Money is allocated to States based upon the number of farmers in each State, the value of farm assets and net farm income. The biggest factor in dividing the money among the States is the number of farmers in each State. The loan volumes of previous years are sometimes considered as well. FSA does not allocate emergency loan money to States because it is impossible to predict the occurrence of natural disasters or declarations of quarantines. Instead, FSA makes money available for loans when a natural disaster or quarantine is declared. Emergency loan money is available on a first-come, first-served basis.
Yes. FSA reserves loan money for two specific categories:
The law requires FSA to reserve or target a portion of its direct and guaranteed operating and farm ownership loan funds for use exclusively by socially disadvantaged applicants (SDA).
SDAs are classified in one or more of the following categories: women, African Americans, Native Americans, Alaskan Natives, Hispanics, Asian Americans and Pacific Islanders. In the farm ownership loan program, the percentage of loan funds targeted for SDAs is based upon the State percentage of the total rural population made up of SDA groups, and the statewide percentage of total farmers who are female. In the operating loan program, the target is determined by the statewide percentage of total farmers from the SDA minority group, and the statewide percentage of total farmers who are female.
The law also requires FSA to reserve or target loan funds for exclusive use by beginning farmers, as follows: Direct Operating, 35 percent; Guaranteed Operating, 40 percent; Direct Farm Ownership, 70 percent; Guaranteed Farm Ownership, 25 percent. Funds remain targeted for beginning farmers in the guaranteed programs until April 1 of each fiscal year. In the direct programs, funds are targeted for beginning farmers until September 1 of each fiscal year.
Yes!! Even when money has run out for a loan program, FSA still accepts, processes, and approves loan applications. Approved loans are held until money becomes available. Loans are funded in a dated order, based on the date the application was received. Submitting an application sets your place in the waiting line for funds, so it is to your advantage to apply for a loan even when there is no money available.
My application is approved, but there is no money available. How can I find out where I stand and when there will be money for my loan?
Usually when this happens, the county offices are required to submit information about approved loans to the State office. The State office staff sets up a waiting list for the State using the loan application dates. The county office can tell you if your loan has been sent to the State office and its status for funding.
Further information on FSA's loan programs is available from local USDA Service Centers or on the FSA website at: www.fsa.usda.gov.
The U.S. Department of Agriculture (USDA) prohibits discrimination in all its programs and activities on the basis of race, color, national origin, age, disability, and where applicable, sex, marital status, familial status, parental status, religion, sexual orientation, genetic information, political beliefs, reprisal, or because all or part of an individual's income is derived from any public assistance program. (Not all prohibited bases apply to all programs.) Persons with disabilities who require alternative means for communication of program information (Braille, large print, audiotape, etc.) should contact USDA's TARGET Center at (202) 720-2600 (voice and TDD). To file a complaint of Discrimination, write to USDA, Director, Office of Civil Rights, 1400 Independence Avenue, SW., Washington, DC 20250-9410, or call (800) 795-3272 (voice) or (202) 720-6382 (TDD). USDA is an equal opportunity provider and employer.
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