Key Takeaways
- FSA offers both Direct loans (USDA lends to you directly) and Guaranteed loans (bank lends, USDA guarantees 95% of the loan)
- Direct loan rates are set by USDA quarterly — currently 5.50% for ownership, 5.25% for operating
- Maximum Direct loan: $600,000 ownership, $400,000 operating, $50,000 microloan
- Beginning farmers get priority for Direct loans and dedicated loan set-asides
- Average processing time: 30–60 days for Direct loans, 2–4 weeks for Guaranteed loans
What Is the USDA Farm Service Agency?
The Farm Service Agency (FSA) is a branch of the U.S. Department of Agriculture that administers farm loan programs, disaster assistance, and commodity price support for American farmers and ranchers. FSA operates through a network of more than 2,100 county service centers across the country.
In fiscal year 2024, FSA made approximately $5.8 billion in farm loans to more than 115,000 farmers and ranchers — making it one of the largest agricultural lenders in the United States. FSA is not a lender of last resort; it is designed to serve farmers who are unable to obtain credit from commercial sources on reasonable terms, as well as beginning and underserved farmers.
Types of FSA Loans
FSA administers five main loan types. Each serves a distinct purpose and has its own maximum loan amount, interest rate, and repayment term.
| Loan Type | Purpose | Max Amount (Direct) | Rate | Max Term | Best For |
|---|---|---|---|---|---|
| Farm Ownership Loan | Buy, expand, or improve farmland | $600,000 | 5.50% | 40 years | Buying land or farm real estate |
| Operating Loan | Seeds, inputs, livestock, operating expenses | $400,000 | 5.25% | 7 years | Annual crop production expenses |
| Emergency Loan | Disaster recovery — drought, flood, fire | $500,000 | Varies | Up to 40 years | Farmers in presidentially declared disaster areas |
| Microloan | Small operating needs, new farmers | $50,000 | 5.25% | 7 years | Beginning farmers, niche operations |
| Farm Storage Facility Loan | Grain bins, silos, cold storage | $500,000 | ~2.5% (CCC) | 12 years | On-farm commodity storage |
FSA Direct vs. Guaranteed Loans: Key Differences
Every FSA loan type except Emergency loans is available in two forms: Direct or Guaranteed. Understanding the difference is critical to choosing the right application pathway.
Direct loans come directly from USDA — the federal government is your lender, and you make payments to FSA. Direct loans carry the lowest rates but have strict eligibility requirements, including demonstrating that you cannot obtain credit elsewhere on reasonable terms. Application and processing happen at your county FSA office.
Guaranteed loans come from a private bank or commercial lender, with USDA guaranteeing up to 95% of the loan amount. You work with your lender — not FSA — to apply. The bank absorbs 5% of the risk. Guaranteed loans can be larger (up to $2.24 million), close faster, and do not require proving you lack access to commercial credit.
For a full comparison, see our FSA Direct vs. Guaranteed Loans guide.
Who Qualifies for FSA Loans
Eligibility requirements vary by loan type, but all FSA loans share several base criteria:
- U.S. citizenship or legal residency — permanent resident aliens are eligible
- Farm history or experience — at least 1 year of farming experience (or agricultural college education) for most loan types
- Acceptable credit history — FSA does not set a minimum credit score, but reviews your entire credit history; consistent delinquency or prior FSA loan default can disqualify you
- Legal capacity — ability to incur the obligation of a loan
- "Unable to obtain credit elsewhere" (Direct loans only) — you must demonstrate that commercial lenders have declined your application or offered only unreasonable terms
Beginning farmers — defined as those with fewer than 10 years of farming experience — receive priority for Direct loans. FSA reserves a portion of each year's loan funding specifically for beginning and socially disadvantaged farmers.
Current FSA Loan Rates (May 2026)
FSA loan rates are set quarterly by the USDA and tied to the cost of government borrowing. They typically run significantly below commercial bank rates for agricultural lending.
| Loan Type | Current Rate | Last Changed | Rate Type |
|---|---|---|---|
| Direct Farm Ownership | 5.50% | Feb 2026 | Fixed |
| Direct Farm Operating | 5.25% | Feb 2026 | Fixed |
| Direct Emergency Loan | 3.75% | Feb 2026 | Fixed |
| Microloan (Operating) | 5.25% | Feb 2026 | Fixed |
| Farm Storage Facility | ~2.50% | Apr 2026 | CCC rate |
| Guaranteed Loans | Negotiated with lender | Ongoing | Fixed or variable |
Rates update quarterly. Verify current rates at fsa.usda.gov before applying.
How to Apply
All FSA Direct loan applications begin at your local county FSA service center. For Guaranteed loans, you apply through a participating commercial lender — your bank contacts FSA to request the guarantee.
Documents typically required for a Direct loan application:
- 3 years of federal income tax returns (Schedule F)
- Current balance sheet (assets and liabilities)
- 12-month cash flow projection
- Legal description of property, equipment, or other collateral
- FSA farm number and tract records
- Government-issued photo ID
- Statements for any existing loans
For a step-by-step walkthrough, see our How to Apply for a USDA Farm Loan guide.
FSA Loan Limits Table
| Loan Type | Direct Limit | Guaranteed Limit | Lifetime Limit |
|---|---|---|---|
| Farm Ownership | $600,000 | $2,236,000 | $600,000 direct |
| Operating | $400,000 | $2,236,000 | $400,000 direct |
| Emergency | $500,000 | N/A | N/A |
| Microloan | $50,000 | N/A | $50,000 |
| Farm Storage Facility | $500,000 | N/A | N/A |
Loan limits are set by Congress and subject to periodic adjustment. Combined Direct loans (all types) cannot exceed $600,000 in aggregate outstanding principal.
Ready to Apply for an FSA Loan?
Visit the USDA FSA website to find your county office, download application forms, and check current rates.
Visit USDA FSA →AcreCompass has no affiliate relationship with USDA. We link to FSA because they offer farmers the lowest available rates.
Frequently Asked Questions
Sources
- USDA Farm Service Agency — Farm Loan Programs
- USDA Economic Research Service — Agricultural Finance Monitor, 2025
- Kansas City Federal Reserve Bank — Agricultural Finance Databook, Q1 2026
- USDA FSA — Annual Report of Farm Loan Activity, FY2024