How to get a farm ownership loan with no down payment

May 11, 2021

New farmers need access to land if they want to scale up their own operations. Owning the land is one of the best ways that a farmer can build wealth, but land prices can be prohibitively expensive for farmers. Many farmers ask: “How can I get a farm ownership loan if I can’t afford the downpayment?”

Fortunately, there is a loan program that doesn’t require a down payment. These are the Farm Service Agency Loans. Beginning farmers qualify for FSA Loans, but the term “beginning” can be misleading. To the USDA, a “beginning” farmer has ten or fewer years of farming experience. But that qualification is not enough to secure an FSA loan in itself.

To qualify for FSA loans, a farmer should have at least 3 years of direct farm management experience. This can include working on someone else’s farm with significant leadership and decision making authority. If the farmer has had a year of business training or a post-secondary degree in ag, the farmer can substitute this experience instead.

FSA loans have some of the lowest interest rates out there. They also require a long and complex application of 28-30 pages. This length and complexity can dissuade farmers from finishing the application, even when they do qualify. Our advice to farmers? Set aside some time every day to work on FSA applications until they are complete. Have a trusted partner or friend double-check the application for you before you send it in. As always, you can team up with FarmRaise to assist with the FSA paperwork as well (more on how we partner with farmers here).

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