FSA Questions/Land Buying

[ChrisB]

I have been researching farm loans, and I found that the FSA does help out beginning/young farmers with loans with 5% down instead of the 20% that my bank wants. I can come up with the 5% better then I can 20%, but it almost seems too good to be true. Is it?

And if that isnt an option, I would like some financial advice from any/all. Sorry if I am bringing up a taboo subject. But I am really close to being out of debt, pretty much putting everything I have to pay off my truck. And I am also putting a little away for the down payment. But the bulk goes to paying extra on it. Would you continue like this, or would you all put more savings and pay a little longer? And if you all can give any advice it would be greatly appreciated.

Thank You in Advance,
Chris

[Robert MoonShadow]

I remember another discussion on here about the FSA – if I recall, there was a lot of mention about they’ll sure help you, but want to micro-manage or look over your shoulder on your management decisions…I think someone had said they really are up on you to explain the “whys” of everything you do. I might not have it totally correct, though…

[Does’ Leap]

Chris:

I have land financed through FSA and it has worked well for me. Best thing to do would be to contact FSA directly to see what options they might have available.

George

[ChrisB]

Thanks guys. I just have to remember to take there number to work with me lol. George I just have a question for you, where they hard to deal with (like a bank) or not?
Thanks,
Chris

[Does’ Leap]

Chris:

They expect a sound business plan supported by a history of good cash flow that can service a loan. They are similar to dealing with a bank, but they specialize in agricultural loans. I did not find them hard to deal with (although it was a slow process getting the loan).

George

[drafthorsey]

Chris,

Trying to get a loan in this climate is just awful. Business loans are tough to come by and FSA will give you a safe haven from all the other shananigans going on in the financial sector. I wouldn’t sleep at night if I even had to buy a house right now from a bank (see MERS nightmares and foreclosures). You know who holds the note, you know who insures your title / deed search and other such delicate issues that come with land or business. 20 years ago I’d say deal with your local bank, but now it’s hard to know who own’s the branch or who’ll own your place if something goes wacky. FSA has rules it must adhere to, and if the rules change as a member of the program they must apparise you by letter. If you fit the criteria go for it! Also find someone out there you can ask all the “stupid” questions (there are none when its your livelihood) and don’t get up from a table until you’re comfortable with what’s getting thrown at you. With Gov’t stuff, the hardest part is filling out the forms right.

Here’s a link for First Time Farmers from FSA and good luck. http://www.fsa.usda.gov/FSA/webapp?area=home&subject=fmlp&topic=bfl

[ChrisB]

Thanks George. And thanks to you too drafthorsey. I will read thru that link and also call my local in the morning. Thank you all again
Chris

[drafthorsey]

Chris,

Looked over the FSA site for you and the good news is you can do a joint FSA/ (your) Bank Loan which may enable you to finance somewhere in the 90 – 95% balance of the loan. Forms are straight forward but go slow and read what they want. You’ll need a form so I’ve included the link to the electronic forms. I’d do this before you talk to anyone as they can then pull it up and help with corrections or what all. Here’s the link: https://eauth.sc.egov.usda.gov/eAuth/selfRegistration/selfRegLevel2Step1.jsp

Here’s your phone number if you don’t have it for Ohio: United States Department of Agriculture
Ohio Farm Service Agency
200 North High St. Room 540
Columbus, OH 43215
(614)255-2441

Good luck.

[blue80]

You may want to check out http://www.cfra.org If you go to the “farm link”, there is a database which covers many states, retiring farmers who are willing to sell to the younger generation. Never know, you may step into a nice rolling operation and get the owner to finance…..

I never had any luck with going FSA, it seemed they only could plug in conventional farm sytems, and sustainable draft horse farming was not a business model they would stand behind.
We also had a wake up learning that ag properties over 30 acres can’t be resold on the conventional lender market, which means the bank writing the loan has to be 1st on the loan for the duration. We were lucky to have a local bank hold our mortgage as a 1st at a higher interest rate, and only a 15yr term was available. The local bank would not write ours as an ag loan because it takes longer for them to foreclose on ag (like a year instead of 60 days)
The things I never learned in school. Maybe just wasn’t listening…

[ChrisB]

Wow thank you drafthorsey. I have a lot to think about. And now I will be better prepared! And thank you Blue80. I will have to read thru that website. I didnt realize there was a website with all of that info on it.
Thanks,
Chris

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