Monday, Mar 4 2013 3:08PM
A new USDA policy may cap interest rates for guaranteed farm loans.
The U.S. Department of Agriculture (USDA) will set new thresholds and maximum limits on interest rates attached to Farm Service Agency (FSA) guaranteed farm loans issued by the agency.
The new interim policies are designed to simplify the process for borrowers and make the loan terms more affordable for rural farmers. The USDA notes that the thresholds may benefit lenders, as well as borrowers, by setting clear policies that are easily understood and fall in line with industry standards that apply to similar types of government loans.
"By providing clear thresholds on interest rates for federally-guaranteed farm loans, USDA is ensuring greater certainty to producers, making compliance easier for our lenders and ensuring greater benefits for all farmers and ranchers," said Agriculture Secretary Tom Vilsack. "It is important that American agriculture continue to play a key role in driving economic growth and creating good-paying jobs across the American middle class. By setting thresholds on interest rates, USDA will strengthen access to farm credit."
The USDA, which has seen an uptick in the number of farm-related loans it provides, is seeking public comment on the interim policy changes. As a wealth of spending cuts may affect budget funding for federal agencies, some may propose new policy changes that allow them to continue extending financing and grants that promote economic community development.
For more information, check out this resource: The U.S. Department of Agriculture