More than 13,000 financially distressed U.S. farmers and ranchers with qualifying loans have received nearly $800 million in assistance as part of the Inflation Reduction Act, U.S. Department of Agriculture officials said today.
The relief effort is part of the $3.1 billion allocated by Congress in the IRA to expedite assistance to distressed borrowers of direct or guaranteed loans administered by USDA’s Farm Service Agency. Approximately 11,000 delinquent borrowers had accounts brought up to date and their next loan installment paid. An additional 2,100 borrowers who had been foreclosed on but still had remaining debt also had their debt cleared. “The funding … helps keep our farmers farming and provides a fresh start for producers in challenging positions,” Agriculture Secretary Tom Vilsack said.
Going forward, USDA plans to administer up to an additional $500 million. The agency will provide $66 million in separate 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 scheduled payments to the end of loans. USDA also is initiating two new case-by-case processes for farm loan borrowers. In the first process, FSA will review delinquencies from 1,600 complex cases, including cases in which borrowers are facing bankruptcy or foreclosure. The second process will use existing direct loan servicing criteria to intervene more quickly with an estimated 14,000 financially distressed borrowers who need assistance to avoid becoming delinquent.
In January 2021, USDA suspended foreclosures and other adverse actions on direct farm loans due to the pandemic and encouraged guaranteed lenders to follow. Last week, the agency reiterated its request to provide time for all of the borrower assistance tools to become available before lenders take action. USDA posted online resources for borrowers to learn more about available assistance.