FSA Loan Program Tips?

[Stocker Steve]

I borrowed through the FSA to build a hay shed a couple years ago. The interest rate was less, but the application process was long and painful.

Have you had any success working with the FSA on operating loans?

 

[Till-Hill]

I won't ever do it again....just because of my loan officer. Makes life very difficult no matter how well I pencil out stuff. And it makes it hard to get anything done other than just maintaining and paying them off.....

 

[Jogeephus]

Against better judgement, the low interest rate enticed me into looking at a loan for a hay barn but after seeing their requirements the hay barn was going to cost triple what I could have one built for without their help. Eight inches of concrete to store hay on under a barn seemed like overkill to me. On top of that, I could only store hay under the barn and they would fine me or call the note if I so much as parked a tractor under it. I don't need their money that bad. Heck, the only reason I looked at it was my investments were paying a higher interest than this note would have been but its just not worth it to me.

 

[highgrit]

I don't want the Government telling me what I can or can not do on my land. On 2nd thought I don't want the Government telling me what to do period. :nod:

 

[Ryder]

Ditto that. :clap:

 

[cowsrus]

I have talked to them about a couple of things, most recently about building a hay barn. You are right about the low interest, and you can only use it to store hay in and they have other requirements to. The guy told me they hadn't made any of these hay barn loans and i said that i could see why. It seems like anytime i have talked to them, its all about the red tape and rules they have to go by, but i think they could try and help more if they wanted to. I always got the impression that they only made loans to "their friends".

 

[bigbull338]

FSA is only there for those that can not get a loan from the bank.they make it sound real good,but you have to much headaches.the bank works great for me no headaches.

 

[john250]

We built a barn (60*45) with a disaster loan from USDA. Within 2 yrs they were pressuring Dad to pay back the money which was supposed to be on a longer term. We paid off with a commercial loan. I won't mess with loans from the USA. The terms and the rates are tempting, but the paperwork makes it an expensive loan.

 

[kjonesel]

Every time I feel out another piece of paper for the government it makes me wonder if anyone ever looks at it. As an electrical contractor we do prevailing wage projects and the paperwork is overwhelming.
Years ago, when I began farming on my own at the age of 20, I took out loans from the government within 4 years I was $60,000 behind because of drought. I will never forgive Dad for encouraging me to borrow that heavily. It's a joke what is going today in agriculture. The government supports inflated land prices and with the ability to borrow values of all related products are held artificially high. My sister works for the government in soil and water and sees nothing wrong with all the programs. Of course she lives in a 2 year old home and my house was built in 1870.
The only tip I would give you is don't.

 

[inbredredneck]

FSA is only there for those that can not get a loan from the bank.they make it sound real good,but you have to much headaches.the bank works great for me no headaches.

This statement could not be farther from the truth.

 

[Till-Hill]

Yes it could be less than the truth. I had a loan at the bank and thought why not do a bunch of paperwork and get cheap interest? Boss has one, buddy has one, lots of people who can get loans at the bank get them to save money. I'm going to save $10,000 but at this point it's not worth it.

 

[TexasBred]

Yes it could be less than the truth. I had a loan at the bank and thought why not do a bunch of paperwork and get cheap interest? Boss has one, buddy has one, lots of people who can get loans at the bank get them to save money. I'm going to save $10,000 but at this point it's not worth it.

Unless you have to also give up your first born seems saving 10 grand would well be worth completing some paperwork and complying with FSA requirements.

 

[Jogeephus]

Yes it could be less than the truth. I had a loan at the bank and thought why not do a bunch of paperwork and get cheap interest? Boss has one, buddy has one, lots of people who can get loans at the bank get them to save money. I'm going to save $10,000 but at this point it's not worth it.

That's why I looked into it. Interest rate was next to nill and I was earning 6% at the bank so why not? But from what I've learned the specifications for each barn is determined by the land grant university in the state you are in. For some reason, and I believe it has to do with chicken farmers, ours says you have to pour eight inches of concrete. For a 60 x 100 hay barn this meant 1778 yards of concrete! For HAY! Needless to say, no one around me bit the hook on this one except maybe a chicken producer but it seems they got some free money for theirs so I don't know what happened.

 

[Beefy]

depends on the loan. ive had two FSA beginning farmer type loans for cattle purchases with 3.65% spread out over over 7 years. worked real well for me. though i didnt have a bunch of stipulations i had to follow. paid off one of those early and the other one i could pay off this year if i so choose. going to turn around and take out a low rate 40 year long loan for land purchase, just gotta fill out a couple of treesworth of paperwork.

 

[TexasBred]

depends on the loan. ive had two FSA beginning farmer type loans for cattle purchases with 3.65% spread out over over 7 years. worked real well for me. though i didnt have a bunch of stipulations i had to follow. paid off one of those early and the other one i could pay off this year if i so choose. going to turn around and take out a low rate 40 year long loan for land purchase, just gotta fill out a couple of treesworth of paperwork.

Beefy you know what they say....the job is not finished until the paperwork is done. ;-)

 

[Farmerjon]

I got tired of the annual visits, machine shed checks (contents) by anyone the county board wanted to allow do the visitations. I wasn't doing anything wrong, but hate being checked on like a criminal. Borrowed from the bank to pay them off, never regretted that decision.

 

[TexasBred]

I got tired of the annual visits, machine shed checks (contents) by anyone the county board wanted to allow do the visitations. I wasn't doing anything wrong, but hate being checked on like a criminal. Borrowed from the bank to pay them off, never regretted that decision.

All don't do it but all usually have some sort of clause within the papework allowing them to make onsite inspections from time to time to verify their collateral is still there. A nice visit at a time that fits into your schedule would be considerate of them tho.

 

[hillbillycwo]

I have considered a FSA loan for my land but now I am not so sure. Someone quoted they can call the note due early. How can they do that unless you are defaulting on the loan?

 

[ga.prime]

I have considered a FSA loan for my land but now I am not so sure. Someone quoted they can call the note due early. How can they do that unless you are defaulting on the loan?

You don't maintain conditions that you agreed to when you were given the loan.

 

[Engler]

As an evil banker I can tell you that the FSA loans aren't that bad. Find someone (lender) who has done them before and they should be able to walk you through it. Yes there is a ton of extra paper work and there is the pita of the annual visits and having to send them all the paperwork to keep their files current every year....

I've had 10 or more people in the last 3 years that we have done gov't loans with that we wouldn't have been able to do the deal otherwise, and that's just me not counting the other 4 lenders in the bank. Most of those were farmers that wanted to buy a piece of land, but didn't have the downpayment even though it still cashflowed or young people getting started that needed the kicker on the interest.

As was stated earlier, they are there for people that wouldn't be able to get normal financing from the bank. Would you rather go through the BS of the guaranteed loan paperwork vs calling the auctioner to line stuff up if you have a train wreck or watch the farm that is across the road sell and not have a chance at it.