STARTING TO FARM WITH FSA
FSA PROGRAMS FOR FIRST-TIME FARMERS IN IOWA
By David Whitaker
Note: Program details are subject to change. Contact your local FSA office or the Iowa Finance Authority for the most current information and requirements.
ARE YOU ELIGIBLE AS A BEGINNING FARMER?
To qualify for FSA beginning farmer programs, you must:
• Have operated a farm for less than 10 years
• Substantially participate in the operation
• Be unable to obtain sufficient credit elsewhere
Let’s get started on your farming journey.
• Have an acceptable credit history
• Be a U.S. citizen or qualified alien
• Ownwership Limitation: You cannot own a farm larger than 30% of the average sized farm in your county, at the time of application.
FSA LOAN PROGRAMS FOR BEGINNING FARMERS
DIRECT FARM OWNERSHIP LOANS
• Maximum Amount: Up to $600,000 (limits may adjust annually)
• Purpose: Purchase farmland, construct buildings, conservation projects
• Terms: Up to 40 years
• Interest Rates: Below commercial rates (variable, based on government borrowing costs)
• Special Feature: Dedicated funding specifically reserved for beginning farmers
• Note: For direct farm ownership loans, you must have operated a farm for at least 3 years
• Value: Max $600,000
• Down Payment: Only 5% required from you
• Remaining Portion: 50% from a commercial lender
• Interest Rate: 1.5% fixed on FSA portion (subject to change)
• Term: 20 years
• Advantage: Dramatically reduces initial capital required to purchase farmland
DIRECT FARM OPERATING LOANS
• Maximum Amount: $400,000
• Purpose: Livestock, equipment, inputs, annual operating expenses
• Terms: 1-7 years depending on purpose
• Special Feature: Simplified application for smaller farmers
MICROLOANS
• Maximum Amount: $50,000
• Purpose: Smaller operations, specialty crops, beginning expenses
• Advantage: Streamlined application process
• Terms: Up to 25 years for farm ownership; 7 years for operating expenses
GUARANTEED FARM LOANS
• Maximum Amount: $2,251,000 (as of 2025)
• Structure: Commercial lender provides loan with FSA guarantee
• Guarantee: FSA guarantees up to 95% of loan amount
• Terms: Negotiated with lender (40 years max for real estate)
• Advantage: More accessible commercial financing
LAND CONTRACT GUARANTEES
• Purpose: Facilitates private land sales between retiring and beginning farmers
• Maximum Guarantee: $500,000
• Down Payment: 5% minimum
• Benefit: Provides financial guarantees to the seller of the farm
IOWA-SPECIFIC PROGRAMS
IOWA BEGINNING FARMER TAX CREDIT PROGRAM
• Benefit: 5-15% tax credit to landowners who lease to beginning farmers
• Result: More accessible land rental opportunities
• Administrator: Iowa Finance Authority
IADD LOAN PARTICIPATION PROGRAM
• Benefit: Reduces interest rates by up to 4% on the IADD portion
• Structure: Works alongside your primary agricultural lender
• Advantage: Lower overall borrowing costs
• Administrator: Iowa Finance Authority
• Structure: Tax-exempt bond financing for reduced interest rates
• Eligibility: Net worth under $852,000
• Maximum: Up to $575,600 per borrower
• Purpose: Purchase of agricultural land, improvements, breeding livestock
• Administrator: Iowa Finance Authority
IOWA BEGINNING FARMER LOAN PROGRAM (BFLP) IOWA BEGINNING FARMER DOWN PAYMENT PROGRAM
• Purpose: Supplemental assistance with farm purchases
• Advantage: Can be combined with federal FSA programs
• Administrator: Iowa Finance Authority
ADDITIONAL SUPPORT PROGRAMS
BEGINNING FARMER AND RANCHER DEVELOPMENT PROGRAM
• Education, training, and mentoring programs
CONSERVATION RESERVE PROGRAM
TRANSITION INCENTIVES (CRP-TIP)
• Incentives for retiring farmers to transfer land to beginning farmers
ENVIRONMENTAL QUALITY INCENTIVES PROGRAM (EQIP)
• Cost-sharing for conservation practices with special funding for beginning farmers
FARM STORAGE FACILITY LOANS
• Low-interest loans for storage with reduced down payment (5%) for beginning farmers
APPLICATION PROCESS
1. Contact your local FSA office for initial consultation
2. Complete FSA forms and Farm Business Plan
3. Gather financial records (3 years if available)
4. Develop farm operating plan and cash flow projections
5. Provide verification of income and credit history
6. Identify property (for farm ownership loans)
7. FSA reviews application for eligibility and feasibility
8. Loan decision based on program criteria
9. Closing process begins for approved loans
SUCCESS STRATEGY TIPS
• Start Early: The application process can take 30-60 days
• Build Experience: Document your agricultural experience carefully
• Financial Records: Maintain detailed financial records and good credit
• Business Plan: Develop a realistic and detailed farm business plan
• Multiple Programs: Consider combining multiple FSA and Iowa programs
• Seek Guidance: Work with experienced FSA staff and agricultural advisors
KEY RESOURCES
• Find Your Local FSA Office: farmers.gov/service-centerlocator (https://www.farmers.gov/working-withus/servicecenter-locator)
• FSA Beginning Farmer Programs: fsa.usda.gov/farmloans (https://www.fsa.usda.gov/programs-andservices/farmloan-programs/beginning-farmers-and-ranchers-loans/ index)
• Iowa Finance Authority: iowafinance.com/beginningfarming-programs (https://www.iowafinance.com/ beginningfarming-programs/)
• Iowa State University Beginning Farmer Center: extension. iastate.edu/bfc (https://www.extension.iastate.edu/bfc/)
David Whitaker Broker / Champion Auctioneer (515) 460-8585 David@wmgauction.com
