The U.S. Department of Agriculture (USDA) announced loan interest rates for May 2021, which are effective May 3. USDA’s Farm Service Agency (FSA) loans provide important access to capital to help agricultural producers start or expand their farming operation, purchase equipment and storage structures, or meet cash flow needs.
Operating and Ownership Loans
FSA offers farm ownership and operating loans with favorable interest rates and terms to help eligible agricultural producers, whether multi-generational, long-time or new to the industry, obtain financing needed to start, expand or maintain a family agricultural operation. For many loan options, FSA sets aside funding for historically disadvantaged producers, including beginning, women, American Indian or Alaskan Native, Asian, Black or African American, Native Hawaiian or Pacific Islander, and Hispanic farmers and ranchers.
Interest rates for Operating and Ownership loans for May 2021 are as follows:
- Farm Operating Loans (Direct): 1.750%
- Farm Ownership Loans (Direct): 3.250%
- Farm Ownership Loans (Direct, Joint Financing): 2.500%
- Farm Ownership Loans (Down Payment): 1.500%
- Emergency Loan (Amount of Actual Loss): 2.750%
FSA also offers guaranteed loans through commercial lenders at rates set by those lenders.
You can find out which of these loans may be right for you by using our Farm Loan Discovery Tool.
Commodity and Storage Facility Loans
Additionally, FSA provides low-interest financing to producers to build or upgrade on-farm storage facilities and purchase handling equipment and loans that provide interim financing to help producers meet cash flow needs without having to sell their commodities when market prices are low. Funds for these loans are provided through the Commodity Credit Corporation (CCC) and are administered by FSA.
- Commodity Loans (less than one year disbursed): 1.125%
- Farm Storage Facility Loans:
- Three-year loan terms: 0.375%
- Five-year loan terms: 0. 875%
- Seven-year loan terms: 1.375%
- Ten-year loan terms: 1.625%
- Twelve-year loan terms: 1.750%
- Sugar Storage Facility Loans (15 years): 2.000%
FSA also reminds rural communities, farmers and ranchers, families and small businesses affected by the year’s winter storms, drought, and other natural disasters that USDA has programs that provide assistance. USDA staff in the regional, state and county offices are prepared with a variety of program flexibilities and other assistance to residents, agricultural producers and impacted communities. Many programs are available without an official disaster designation, including several risk management and disaster assistance options.
Through September 1, 2021, FSA’s Disaster Set-Aside provision is available to direct loan borrowers who have been impacted by the pandemic. This enables an upcoming annual installment to be set aside for the year and added to the final installment. For annual operating loans, the loan maturity date may be extended up to twelve months in order to set aside the installment. This provision is normally used in the wake of natural disasters, and a second Disaster Set-Aside may be available for direct loan borrowers who already have a DSA in place on a loan due to another designated natural disaster.