[permaculture] Fwd: [food_justice] Beginning Farmer Rates Make Land Affordable

rafter sass liberationecology at gmail.com
Sat Jun 20 09:17:21 EDT 2009



Begin forwarded message:

> From: dorinda moreno <fuerzamundial at gmail.com>
> Date: June 20, 2009 1:56:33 AM EDT
> To: growing_foodandjustice <growing_foodandjustice at lists.riseup.net>
> Subject: [food_justice] Beginning Farmer Rates Make Land Affordable
>
> Thanks to: [youthfoodmovement]: "Cecily at slowfoodusa.org"
> <cecily.slowfood at gmail.com>
> Date: Fri, 19 Jun 2009 11:17:48 -0700 (PDT)
> Subject: [youthfoodmovement] Beginning Farmer Rates Make Land  
> Affordable
>
> Beginning Farmer Rates Make Land Affordable
> USDA is offering big benefits to beginning farmers: Who else can
> qualify for 1.5 percent, 20-year fixed interest rates on a big chunk
> of any farm mortgage? No, that's not a typo. The Farm Service Agency's
> Down Payment Program for beginning or limited resource farmers may be
> the best deal in decades for someone interested in buying land at the
> moment.
>
> "That's the best rate I've ever seen for a USDA loan program, and I've
> worked in farm credit for 27 years," says Greg Beachy with Farm Credit
> Services of Mid-America in Louisville, serving Ohio, Indiana,
> Tennessee and Kentucky. Borrowers who've stumbled onto the offer are
> already backlogged, but he expects a surge of applicants as word
> spread. "USDA really is looking for ways to get young people into
> farming," he tells me.
>
> Thanks to the 2008 farm bill, minimum rates on USDA's entry-level Down
> Payment Program loans were lowered from 4 percent to 1.5 percent, just
> in time to ride the wave of rock-bottom Treasury costs that collapsed
> last fall. The deal won't last forever, though, as Treasury rates are
> beginning to climb again and the wait list for USDA's matching funds
> is growing. So study up.
>
> A beginner is defined as someone with less than 10 years of farming
> experience and who has a substantial interest in the operation. What
> they qualify for is pretty special:
>
> The borrower must pay at least a 5 percent down payment on a property;
> FSA will fund up to 45 percent of a $500,000 purchase ($225,000
> maximum) at its subsidized interest rates with a loan term of 20
> years; commercial lenders who finance the balance of the mortgage must
> stretch amortization 30 years. Realistically, that means the borrower
> will pay a blend of 1.5 percent interest on 45 percent of a loan and
> possibly about 7.7 percent (a typical rate today for a high risk
> borrower) on the remainder.
>
> FSA says 400 borrowers have been approved for the program so far this
> year, up from 30 this time a year ago. But funds have been depleted
> fast, and Congress will not authorize more money until the fiscal year
> begins next Oct. 1, at the earliest.
>
> As a result, Phil Kimmel, Farm Credit Services of Mid-America senior
> vice president for credit, worries that some real estate purchases may
> fall through without some extra help from private lenders. "We are
> considering a position to offer bridge financing based on FSA's
> commitment until funds are available, but we haven't done that yet. We
> have provided bridge loans for FSA's portion if we could get security
> or maybe a parent to cosign until the money is available," Kimmel
> says.
>
> All Farm Credit institutions are required by law to lend a certain
> percent of their funds to young, beginning and small farmers. In 2008,
> young farmers under 35 made up 26 percent of FCS of Mid-America's new
> loans or leases, and beginning farmers about 40 percent of that
> portfolio.
>
> Rates change periodically on FSA's loan programs; for details see
>
> http://www.fsa.usda.gov/…
>
> © Copyright 2009 DTN. All rights reserved.
>
> Posted at 08:31 AM CDT, June 11, 2009 by Marcia Zarley Taylor
>
>
>
>
> -- 
> Dorinda Moreno
> Elders of 4 Colors 4 Directions
> Hitec Aztec Collaborations/FM Global
> We Are the Ones We Have Been Waiting For!
> <fuerzamundial at gmail.net>
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