WASHINGTON – The US Department of Agriculture announced on Oct. 18 that distressed borrowers with qualifying USDA farm loans had received nearly $800 million in assistance.
The agency said the funding was part of the $3.1 billion assistance for farm loan borrowers provided by the Inflation Reduction Act (IRA).
The IRA helped direct the USDA to expedite assistance to borrowers of direct or guaranteed loans administered by the Farm Service Agency, whose operations face financial risk.
“Through no fault of their own, our nation’s farmers and ranchers have faced incredibly tough circumstances over the last few years,” said Agriculture Secretary Tom Vilsack. “The funding included in today’s announcement helps keep our farmers farming and provides a fresh start for producers in challenging positions.”
USDA noted that more than 13,000 borrowers are already receiving help from IRA funding.
First, approximately 11,000 delinquent direct and guaranteed borrowers had accounts brought current. The USDA also paid the next scheduled annual installment for these direct loan borrowers giving them peace of mind in the near term.
Next, approximately 2,100 borrowers had their farms foreclosed on and still had remaining debt. However, the debt was resolved to cease debt collections and garnishment.
The National Farmers Union (NFU) shared its support for the debt relief plant sent out by the USDA and how it will help farmers going forward.
“Let’s be clear – this debt relief is going to help keep family farms in business, not just for this generation but for generations to come,” said Rob Larew, president of NFU. “It’s promising to see how USDA is implementing provisions of the Inflation Reduction Act that will help thousands of distressed loan borrowers. The announcement is the result of years of advocacy and leadership and is a big step toward improving the way USDA approaches lending.”
Along with the automatic assistance provided, the USDA outlined steps for an additional $500 million in payments to benefit other distressed borrowers.
The agency plans to administer $66 million in separate automatic payments, using COVID-19 pandemic relief funds to support up to 7,000 direct loan borrowers who used FSA’s disaster set-aside option during the pandemic to move their scheduled payments to the end of their loans.
USDA also plans to initiate two case-by-case processes to provide additional assistance to farm loan borrowers.
“Under the first new process, FSA will review and assist with delinquencies from 1,600 complex cases, including cases in which borrowers are facing bankruptcy or foreclosure,” the agency stated. “The second new process will add a new option using existing direct loan servicing criteria to intervene more quickly and help an estimated 14,000 financially distressed borrowers who request assistance to avoid even becoming delinquent.”
More details on the distressed borrower programs can be found here.