U.S. Department of Ag Announces Loan Interest Rates for June 2023

Tuesday, June 6th, 2023 -- 8:01 AM

(Wisconsin Ag Connection) The U.S. Department of Agriculture (USDA) announced loan interest rates for June 2023, which are effective June 1, 2023.

According to the Wisconsin Ag Connection, USDA’s Farm Service Agency (FSA) loans provide important access to capital to help agricultural producers start or expand their farming operation, purchase equipment and storage structures or meet cash flow needs.

On Aug. 16, 2022, President Biden signed the Inflation Reduction Act (IRA) into law. It is a historic, once-in-a-generation investment and opportunity for the agricultural communities that USDA serves.

Section 22006 of the IRA provided $3.1 billion for USDA to provide relief for distressed borrowers with certain FSA direct and guaranteed loans and to expedite assistance for those whose agricultural operations are at financial risk.

In October 2022, USDA provided approximately $800 million in initial IRA assistance to more than 11,000 delinquent direct and guaranteed borrowers and approximately 2,100 borrowers who had their farms liquidated and still had remaining debt.

On May 1, 2023, FSA announced that nearly $130 million in additional, automatic financial assistance had been obligated for qualifying farm loan program borrowers facing financial risk.

This assistance included, assistance to direct loan borrowers who were past due on a qualifying direct loan as of Sept. 30, 2022, but by fewer than 60 days, and remained delinquent on that loan as of March 27, 2023.

Assistance to borrowers who restructured a qualifying direct loan after Feb. 28, 2020, through primary loan servicing available through FSA. Assistance to borrowers whose interest owed on their qualifying direct loan debt exceeded the principal owed (on a loan-by-loan basis).

In May 2023, FSA began accepting and reviewing individual requests for assistance if they took certain extraordinary measures to avoid delinquency on their direct FSA loans, such as taking on or refinancing more debt, selling property, or cashing out retirement or college savings accounts.

On May 19, USDA mailed a letter to all FSA direct loan borrowers detailing eligibility and how to request extraordinary measures assistance. Also in May, FSA started accepting and reviewing individual distressed borrower assistance requests from direct loan borrowers who missed a recent installment or are unable to make their next scheduled installment.

All FSA borrowers should have received a letter detailing the process for seeking this type of assistance even before they become delinquent. As the letter details, borrowers who are within two months of their next installment may seek a cash flow analysis from FSA using a recent balance sheet and operating plan to determine their eligibility. 

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