Minnesota Farm Service Agency Executive Director Perry Aasness Monday announced that effective Oct. 1 the maximum loan size for the FSA guaranteed loan program will increase to $1,094,000.  The previous loan limit was $949,000.  The increased guaranteed loan limits reflect the rising input
costs affecting farmers.

"The higher lending limit will allow Minnesota lenders, using the guaranteed loan program, to better meet the increasing credit needs of the state's farmers and ranchers," Aasness said.

FSA's guarantee loan programs allow lenders to make agricultural credit available to farmers who do not meet the lender's normal underwriting criteria.  FSA provides loans to beginning farmers and limited resource producers, and ensures lenders (e.g., banks, Farm Credit System institutions, credit unions) with a guarantee of up to 95 percent of the loss of principal and interest on a loan.  

There are two types of guaranteed loans: Guaranteed Farm Ownership and Guaranteed Operating.  FO Loans may be made to purchase farmland, construct or repair buildings and other fixtures, develop farmland to promote soil and water conservation, or to refinance debt.

Guaranteed OL Loans may be used to purchase livestock, farm equipment, feed, seed, fuel, farm chemicals, insurance, and other operating expenses. Operating Loans can also be used to pay for minor improvements to buildings, costs associated with land and water development, family living expenses, and to refinance debts under certain conditions.

In addition to guaranteed loans, FSA can also provide direct loans to qualified farmers and ranchers.

Farmers interested in FSA guaranteed loan programs may contact their lender or their local FSA office.