What is the USDA's role in farm lending?
The USDA Farm Service Agency, usually called FSA, makes and guarantees loans to farmers and ranchers, including some who cannot get credit elsewhere on reasonable terms. Its fact sheets describe the programs, and local offices handle applications.
Other USDA agencies, such as Rural Development, run different loan and grant programs, mostly for rural housing, businesses and community needs.
Names, limits and terms are adjusted over time. Always check the current FSA materials or call the office.
- FSA: farm operating and ownership loans
- Rural Development: housing, business and community programs
- NRCS: conservation planning and cost-share
What is the difference between direct and guaranteed loans?
In general, a direct loan comes from the agency itself. A guaranteed loan comes from a commercial lender, with the agency promising to cover part of the lender's loss if the borrower defaults. This can help borrowers who would not otherwise qualify with a bank.
Each path has different paperwork, lenders and requirements. Ask which fits your situation and which the office recommends.
Do not assume you will qualify or that you will not. Eligibility is determined by the agency after an application.
- Direct: funded and serviced by the agency
- Guaranteed: made by a commercial lender with an agency guarantee
- Ask which path fits your finances
What kinds of purposes do these loans serve?
FSA farm loans generally cover operating costs, such as seed, feed, fuel, labor and equipment, and ownership costs, such as buying or improving land. Some programs focus on emergency needs after a disaster, and some on microloans for smaller needs.
Not every purpose is allowed in every program. Ask the loan officer to explain what each can fund and what it cannot.
Be clear about how you will repay, since that is a central question in every application.
- Annual operating expenses
- Equipment and livestock purchases
- Land purchase and improvements
- Emergency loss recovery
- Smaller loans with simpler paperwork for some borrowers
Who are the programs designed to help?
USDA materials describe programs aimed at beginning farmers and ranchers and at those who have been underserved, as well as at established family farms. Definitions, such as what counts as a beginning farmer, are set by the agency and can change.
If you are new to farming, ask about down payment options, mentoring or training requirements that may be attached.
If you have been turned down before, ask whether something has changed, or whether another program fits better.
What do applications involve?
Expect forms about your farm, your finances, your experience and your plans. You may need tax returns, financial statements, a farm plan and information on any debts. A loan officer can tell you what is needed.
Processing takes time, so apply well before you need the money. Do not make purchases that depend on a loan before it is approved.
Keep copies of everything you submit and note who you talk with.
- Tax returns and financial statements
- A written farm plan
- Information on current debts
- Proof of experience or training where asked
What happens after approval?
Loans come with conditions, such as keeping records, carrying insurance and using funds as agreed. You may be asked to report on the farm. Understand these before signing.
If your situation changes, tell your loan officer early. Agencies often have options for borrowers in trouble, but they depend on speaking up in time.
Many borrowers find that staying in touch builds trust and can open doors to later credit.
- Keep records as required
- Carry required insurance
- Use funds only as agreed
- Report changes to your loan officer early
How do you get started?
Call or visit your county FSA office, ask for a farm loan officer, and explain what you hope to do. Bring a short description and your questions. The farmers.gov site also offers general information and tools.
Use caution with anyone who offers to get you a USDA loan for a fee. Official help from FSA is free of charge for the application itself, and you can confirm that with the office.
Write down your questions before you go: how much you may need, what it is for, and how soon you need an answer.
Key takeaways
- FSA makes and guarantees farm loans; Rural Development runs other rural programs.
- Direct loans come from the agency; guaranteed loans come from a lender with an agency backstop.
- Rules and limits change, so get current information from your local office.
- Apply early, keep copies and stay in touch with your loan officer.
- Be wary of anyone who charges a fee to obtain a USDA loan for you.
Sources and further reading
Last reviewed: November 12, 2026. Written by the Rural Farm Life Editorial Team. See our editorial policy.