The U.S. Department of Agriculture is making changes to its farm loan programs aimed at making it easier and faster for farmers and ranchers to access credit.
The USDA announced the updates last week, saying the changes will reduce administrative work, modernize technology, and speed up the processing of farm loans through the Farm Service Agency.
FSA provides direct and guaranteed loans to farmers and ranchers who are unable to obtain enough commercial credit at reasonable rates and terms. The loans can be used to purchase farmland or equipment, finance agricultural production, and cover day-to-day operating expenses.
One of the changes makes the Application Fast Track process permanent. The program, which began as a pilot in 2023, speeds up the underwriting process for lower-risk direct loan applicants based on financial benchmarks and past repayment history.
Since the pilot began, an average of 23 percent of direct loan customers have qualified for the streamlined process. According to USDA, the program has reduced application processing times by about eight calendar days while also increasing efficiency for FSA staff.
The fast-track process is already available nationwide to qualifying producers. USDA is also changing how collateral is valued for direct loans, with the goal of speeding up loan closings.
The agency is also streamlining its Guaranteed Loan program for lenders participating in the Preferred Lender Program. These lenders include experienced financial institutions that work with FSA to provide loans backed by a federal guarantee.
Beginning October 1, preferred lenders will be able to use delegated authority to certify that applicants meet certain FSA requirements involving creditworthiness, financial feasibility, and collateral. The change is expected to reduce documentation and shorten processing times.
USDA is also modernizing the technology used for guaranteed loans. A new electronic system is expected to allow loan applications, lender notifications, and supporting documents to be submitted electronically, replacing much of the agency’s current paper-based process.
The new system is expected to begin rolling out in early 2027. Paper applications will continue to be accepted, and USDA says lenders will receive additional information and training before the transition.
The modernization effort will begin with guaranteed loans and eventually expand to other types of USDA farm loans.
