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.

Find Your County FSA Office
All FSA loan applications begin at your local county service center. Find yours at fsa.usda.gov using your ZIP code. Pre-application meetings are free and highly recommended.

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:

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 TypeCurrent RateLast ChangedRate Type
Direct Farm Ownership5.50%Feb 2026Fixed
Direct Farm Operating5.25%Feb 2026Fixed
Direct Emergency Loan3.75%Feb 2026Fixed
Microloan (Operating)5.25%Feb 2026Fixed
Farm Storage Facility~2.50%Apr 2026CCC rate
Guaranteed LoansNegotiated with lenderOngoingFixed 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:

For a step-by-step walkthrough, see our How to Apply for a USDA Farm Loan guide.

FSA Loan Limits Table

Loan TypeDirect LimitGuaranteed LimitLifetime Limit
Farm Ownership$600,000$2,236,000$600,000 direct
Operating$400,000$2,236,000$400,000 direct
Emergency$500,000N/AN/A
Microloan$50,000N/A$50,000
Farm Storage Facility$500,000N/AN/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

What is the minimum credit score for an FSA loan?
FSA does not set a published minimum credit score for Direct loans. Instead, FSA loan officers review your full credit history for a pattern of timely repayment. Borrowers with past credit problems may still qualify if the issues were beyond their control (such as medical emergencies or disaster losses) and they demonstrate a willingness to repay obligations.
How long does an FSA loan take to process?
Direct loans typically take 30–60 days from complete application submission to loan approval. Guaranteed loans processed through a participating lender generally close in 2–4 weeks. The biggest delay factor is incomplete applications — a pre-application meeting at your county FSA office can significantly reduce processing time.
Can I have both a Direct and a Guaranteed FSA loan?
Yes. Many farmers hold both a Direct loan and a Guaranteed loan simultaneously, as long as their aggregate Direct loan balance does not exceed $600,000 and they meet eligibility requirements for each loan type. A farmer might, for example, have a Direct Operating Loan at 5.25% and a Guaranteed Farm Ownership Loan through their commercial bank.
What does "unable to obtain credit elsewhere" mean?
For Direct loans, FSA requires you to demonstrate that you cannot obtain credit from private lenders at reasonable rates and terms. This does not mean you must have been formally rejected — it means commercial credit is not available to you on terms you can reasonably be expected to repay. You may be asked to provide denial letters from one or more lenders, or your loan officer may make this determination based on your credit profile and market conditions.
Do FSA loans require a down payment?
FSA Farm Ownership Loans (Direct) do not require a specific down payment percentage, but FSA will not lend more than the appraised value of the property. For the FSA Down Payment Loan Program — a special loan for beginning farmers — you pay 5% down, FSA provides 45%, and you obtain a conventional loan for the remaining 50%.
Are FSA loan rates fixed or variable?
FSA Direct loan rates are fixed for the life of the loan and set quarterly. The rate you receive at closing is the rate you keep for the entire term — whether 7 years or 40 years. Guaranteed loan rates are negotiated between you and your participating lender and may be fixed or variable depending on the lender's terms.
What if my FSA loan application is denied?
If your application is denied, FSA must provide written reasons. You have the right to appeal to your state FSA committee, and ultimately to the National Appeals Division. Common denial reasons include insufficient repayment ability, prior FSA loan default, or failure to meet the "unable to get credit elsewhere" standard. Your loan officer can advise on steps to improve your application for resubmission.
Do FSA loans have prepayment penalties?
No. FSA Direct loans do not carry prepayment penalties. You can pay off your loan early without any additional fees or interest charges. This makes FSA loans particularly attractive if you expect to refinance with a commercial lender once your farm's equity and credit profile improve.

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