The U.S. Department of Agriculture (USDA) announced Tuesday that up to $500 million in additional federal funds will be made available for up to 23,000 borrowers who have had trouble paying off their farm loans. This is in addition to $800 million that the USDA has already made available in assistance to those behind on their loan payments.
“The goal here obviously is to help these folks stay on the farm and give them a piece of mind,” says U.S. Ag Secretary Tom Vilsack.
The money, which has been allocated from the “Inflation Reduction Act,” is being used to provide assistance to borrowers of farm loans administered by the USDA’s Farm Service Agency whose operations are facing bankruptcy or foreclosure.
Vilsack says the USDA is focusing on a new path regarding the agency’s approach to delinquent borrowers.
“In the past, that approach has been to monitor performance, and in the event that the people are unable to make payments, the USDA would then go through the legal processes of collecting the debt. We’re going to focus on a more proactive approach to avoid those circumstances and situations and try to address and assist folks before they get to a point of no return,” says Vilsack.
He says the USDA is looking to help several different groups of borrowers.
“One group is roughly 1,600 borrowers who are 60 days or more delinquent, but who are now engaged in a bit more complicated circumstances. Either they’re in bankruptcy or they were already in foreclosure. We will be working with them on a case-by-case basis to figure out ways in which we can handle and deal with the delinquency that they find themselves in,” says Vilsack.
He also says federal money will also be available to help an additional 14,000 borrowers who may experience cash-flow issues due to recent unforeseen circumstances.
“We now have barge issues on the Mississippi River because of drought. That may impact the folks who are doing business with USDA and may affect and impact their cash flow,” Vilsack says as one example of such a circumstance where borrowers may need assistance.
The USDA has also announced they will administer $66 million in automatic payments, using COVID-19 pandemic relief funds, to support up to 7,000 direct loan borrowers who used FSA’s disaster-set-aside option during the pandemic to move their scheduled payments to the end of their loans.
Vilsack says this round of $500 million – along with nearly $800 million already made available to borrowers who had been behind on their payments – accounts for about 42 percent of the $3.1 billion from the Inflation Reduction Act set aside to help farmers behind on their loan payments.
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