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Re: [northeasternpermaculture] Fwd: [food_justice] Beginning Farmer Rates Make Land Affordable

From: Andrew
Sent on: Sunday, June 21, 2009 8:26 PM

--- On Sat, 6/20/09, rafter sass <[address removed]> wrote:

From: rafter sass <[address removed]>
Subject: [northeasternpermaculture] Fwd: [food_justice] Beginning Farmer Rates Make Land Affordable
To: "Northeastern Permaculture (List)" <[address removed]>, [address removed], [address removed], [address removed]
Date: Saturday, June 20, 2009, 9:17 AM

Begin forwarded message:

From: dorinda moreno <[address removed]>
Date: June 20,[masked]:56:33 AM EDT
To: growing_foodandjustice <[address removed]>
Subject: [food_justice] Beginning Farmer Rates Make Land Affordable

Thanks to: [youthfoodmovement]: "[address removed]"
<[address removed]>
Date: Fri, 19 Jun[masked]:17:48 -0700 (PDT)
Subject: [youthfoodmovement] Beginning Farmer Rates Make Land Affordable

Beginning Farmer Rates Make Land Affordable
USDA is offering big benefits to beginning farmers: Who else can
qualify for 1.5 percent, 20-year fixed interest rates on a big chunk
of any farm mortgage? No, that's not a typo. The Farm Service Agency's
Down Payment Program for beginning or limited resource farmers may be
the best deal in decades for someone interested in buying land at the

"That's the best rate I've ever seen for a USDA loan program, and I've
worked in farm credit for 27 years," says Greg Beachy with Farm Credit
Services of Mid-America in Louisville, serving Ohio, Indiana,
Tennessee and Kentucky. Borrowers who've stumbled onto the offer are
already backlogged, but he expects a surge of applicants as word
spread. "USDA really is looking for ways to get young people into
farming," he tells me.

Thanks to the 2008 farm bill, minimum rates on USDA's entry-level Down
Payment Program loans were lowered from 4 percent to 1.5 percent, just
in time to ride the wave of rock-bottom Treasury costs that collapsed
last fall. The deal won't last forever, though, as Treasury rates are
beginning to climb again and the wait list for USDA's matching funds
is growing. So study up.

A beginner is defined as someone with less than 10 years of farming
experience and who has a substantial interest in the operation. What
they qualify for is pretty special:

The borrower must pay at least a 5 percent down payment on a property;
FSA will fund up to 45 percent of a $500,000 purchase ($225,000
maximum) at its subsidized interest rates with a loan term of 20
years; commercial lenders who finance the balance of the mortgage must
stretch amortization 30 years. Realistically, that means the borrower
will pay a blend of 1.5 percent interest on 45 percent of a loan and
possibly about 7.7 percent (a typical rate today for a high risk
borrower) on the remainder.

FSA says 400 borrowers have been approved for the program so far this
year, up from 30 this time a year ago. But funds have been depleted
fast, and Congress will not authorize more money until the fiscal year
begins next Oct. 1, at the earliest.

As a result, Phil Kimmel, Farm Credit Services of Mid-America senior
vice president for credit, worries that some real estate purchases may
fall through without some extra help from private lenders. "We are
considering a position to offer bridge financing based on FSA's
commitment until funds are available, but we haven't done that yet. We
have provided bridge loans for FSA's portion if we could get security
or maybe a parent to cosign until the money is available," Kimmel

All Farm Credit institutions are required by law to lend a certain
percent of their funds to young, beginning and small farmers. In 2008,
young farmers under 35 made up 26 percent of FCS of Mid-America's new
loans or leases, and beginning farmers about 40 percent of that

Rates change periodically on FSA's loan programs; for details see���

�� Copyright 2009 DTN. All rights reserved.

Posted at 08:31 AM CDT, June 11, 2009 by Marcia Zarley Taylor

Dorinda Moreno
Elders of 4 Colors 4 Directions
Hitec Aztec Collaborations/FM Global
We Are the Ones We Have Been Waiting For!
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