The U.S. Department of Agriculture (USDA) has a wide variety of loan programs to support farmers, ranchers, and other people living in rural communities. USDA does this through Farm Loans, Housing Assistance loans, Rural Development Loans, and Beginning Farmers and Ranchers Loans.
USDA’s Farm Service Agency (FSA) makes direct and guaranteed farm ownership and operating loans to family-size farmers and ranchers who cannot obtain commercial credit from a bank, Farm Credit System institution or other lender. FSA offers many different types of loans, such as:
- Farm Ownership Loans, which help recipients purchase or enlarge their farms or ranches, construct new buildings, or improve new ones, pay closing costs, and pay for soil and water conservation and protection.
- Operating loans, which help recipients pay for livestock, equipment, minor real estate repairs and annual operating expenses.
- Microloans, which are direct farm ownership and operating loans with an expedited application process and reduced paperwork. These loans are geared more towards smaller, non-traditional, niche projects.
- Emergency loans, which provide financial assistance to recipients who have suffered qualifying losses to their farm or ranch from natural disasters.
- EZ Guarantee loans, which serve the same purpose as microloans.
- Conservation loans, which help recipients complete a conservation a conservation practice in an approved conservation plan.
- Land contract guarantees, which provide certain financial guarantees to the seller of a farm or ranch through a land contract sale. This program is oriented towards beginning or socially disadvantaged farmers and ranchers.
- Highly Fractioned Indian Land Loans, which provide a way for tribes, tribal members and tribal entities to purchase fractioned interests through intermediary lenders.
USDA provides homeownership opportunities to low- and moderate-income rural Americans through several loan, grant and loan guarantee programs. The programs also make funding available to individuals to finance vital improvements necessary to make their homes decent, safe and sanitary. These programs include:
- Multifamily Housing Loan Guarantees, which works with qualified private-sector lenders to provide financing to qualified borrowers to increase the supply of affordable rental housing for low- and moderate-income individuals and families in eligible rural areas and towns.
- Off-Farm Labor Housing Direct Loans & Grants, which provide affordable financing to develop housing for year-round and migrant or seasonal domestic farm laborers.
- On-Farm Labor Housing Loans, which provide affordable financing to develop or rehabilitate affordable rental housing for very-low income domestic, migrant, and seasonal farm laborers.
- Multifamily Preservation and Revitalization (MPR), which restructures loans for existing Rural Rental Housing and Off-Farm Labor Housing projects to help improve and preserve the availability of safe affordable rental housing for low-income residents.
- Multifamily Housing Direct Loans, which provide competitive financing for affordable multi-family rental housing for low-income, elderly, or disabled individuals and families in eligible rural areas.
USDA provides funding for projects that bring housing, community facilities, business guarantees, utilities and other services to rural America. USDA provides technical assistance and financial backing for rural businesses and cooperatives to create quality jobs in rural areas. These programs include:
- Electric Infrastructure Loan & Loan Guarantee Program. This program makes insured loans and loan guarantees to nonprofit and cooperative associations, public bodies and other utilities. Insured loans primarily finance the construction of electric distribution facilities in rural areas.
- Water & Waste Disposal Loan Guarantees. This program helps private lenders provide affordable financing to qualified borrowers to improve access to clean, reliable water and waste disposal systems for households and businesses in rural areas.
- Multifamily Housing Loan Guarantees. The program works with qualified private-sector lenders to provide financing to qualified borrowers to increase the supply of affordable rental housing for low- and moderate-income individuals and families in eligible rural areas and towns.
- Telecommunications Infrastructure Loans & Loan Guarantees. This program provides financing for the construction, maintenance, improvement and expansion of telephone service and broadband in rural areas.
- Community Facilities Guaranteed Loan Program. This program provides loan guarantees to eligible lenders to develop essential community facilities in rural areas.
- Water & Waste Disposal Loan & Grant Program. This program provides funding for clean and reliable drinking water systems, sanitary sewage disposal, sanitary solid waste disposal and storm water drainage to households and businesses in eligible rural areas.
- Rural Economic Development Loan & Grant Program. This program provides funding for rural projects through local utility organizations.
- Rural Energy for America Program Renewable Energy Systems & Energy Efficiency Improvement Guaranteed Loans & Grants. The program provides guaranteed loan financing and grant funding to agricultural producers and rural small businesses for renewable energy systems or to make energy efficiency improvements.
- Energy Efficiency and Conservation Loan Program. The Energy Efficiency and Conservation Loan Program (EECLP) provides loans to finance energy efficiency and conservation projects for commercial, industrial and residential consumers. With the EECLP, eligible utilities, including existing Rural Utilities Service borrowers can borrow money tied to Treasury rates of interest and re-lend the money to develop new and diverse energy service products within their service territories.
- Single Family Housing Guaranteed Loan Program. The Section 502 Guaranteed Loan Program assists approved lenders in providing low- and moderate-income households the opportunity to own adequate, modest, decent, safe and sanitary dwellings as their primary residence in eligible rural areas.
- Business & Industry Loan Guarantees. This program offers loan guarantees to lenders for their loans to rural businesses.
- Community Facilities Direct Loan & Grant Program. This program provides affordable funding to develop essential community facilities in rural areas.
- Rural Broadband Loans, Loan/Grant Combinations, and Loan Guarantees. This program furnishes loans and loan guarantees to provide funds for the costs of construction, improvement, or acquisition of facilities and equipment needed to provide service at the broadband lending speed in eligible rural areas.
- State Bulk Fuel Revolving Loan Fund. This program helps State governments establish and support revolving loan funds to provide a more cost-effective means of purchasing fuel for remote communities that are not served by surface transportation (highways, transit systems, railways, and waterways) year round.
USDA, through the Farm Service Agency, provides direct and guaranteed loans to beginning farmers and ranchers who are unable to obtain financing from commercial credit sources. Each fiscal year, the Agency targets a portion of its direct and guaranteed farm ownership (FO) and operating loan (OL) funds to beginning farmers and ranchers.
Infrastructure Investment & Jobs Act - USDA
Summary of BIL Components & Current Notice of Funding Opportunities
The Infrastructure Investment & Jobs Act (otherwise known as the Bipartisan Infrastructure Law, or BIL), which was signed into law by President Joe Biden on November 15, 2021, has made historic investments in America’s environmental infrastructure. The U.S. Department of Agriculture’s various grant programs have received substantial new financial support under BIL. The new resources that USDA has obtained under BIL include:
- The law provides $2 billion for the ReConnect program, which provide loans and grants to fund the acquisition, construction and maintenance of facilities providing broadband service in rural areas.
- The law provides $10 billion for a biproduct pilot program at the USDA in partnership with land grant universities to study the benefits of using materials derived from agricultural commodities in the production of consumer and construction products.
- The law provides $918 million over five years for the USDA’s Watershed Programs, which are administered through USDA’s Natural Resources Conservation Service. On March 3, 2022, President Joe Biden and Agriculture Secretary Tom Silsack announced that the first round of funds, worth $166.5 million, had been made available.
- Of the $918 million for Watershed Programs, the largest share, $500 million, will be going to the Watershed and Flood Prevention operations program.
- Another $118 million is earmarked for the Watershed Rehabilitation Program, which provides funds to renovate dams.
- About $300 million is allocated for the wildfire resilience in the Emergency Watershed Protection Program.
A full list of outstanding notice of funding opportunities for the USDA’s grant programs can be found below. These programs fall into several key categories, including:
- Conservation-related grants, which are by far the most common type of grants that can be found below. These include Conservation Innovation Grants, Conservation Collaboration Grant Agreements, Conservation Partnership grants and more.
- Programs to support rural communities, including those aimed at promoting micro-entrepreneurship, health care, economic and community development, and education.
- Renewable energy programs, such as the Renewable Energy Systems and Energy Efficiency Improvement program.
- Tribal programs, including those which provide COVID-19 protection to tribal seafood workers, funding for tribal governments and tribal education.
- Research programs, including those aimed at soil research, agriculture and food research, citrus disease research and small business innovation research.
*Faegre Drinker Policy Assistant Andrew Bryant contributed to this article.
