$ 67 million in loans available from Heirs through Property Relending Program; aims to help agricultural producers, landowners in solving land ownership, succession issues | Farm-and-ranch
The U.S. Department of Agriculture (USDA) provides 67 million competitive loans. Intermediate lenders – credit unions, credit unions, and nonprofits – can loan up to $ 5 million at an interest rate of $ 1 during the two-month filing window that opened in late August Apply for percent.
After the Farm Service Agency (FSA) selects lenders, heirs can apply for loans and assistance directly from these lenders. Heir ownership problems have long been a barrier to access to USDA programs and services for many producers and landowners, and this re-lending program provides access to capital to help producers resolve these issues.
According to the agency, the heir on-loan program is another example of how the USDA is working to restore confidence in America’s farmers and ranchers. HPRP is a loan and must be repaid under the 2018 Farm Bill.
The benefits of the program extend well beyond the participants. It will also conserve farmland farmland, protect family farm heritage, and support economic viability.
To be eligible, intermediary lenders must be certified as a community development financial institution and have experience and skills in the issuing and servicing of agricultural and commercial loans of a similar nature.
Selected intermediary lenders set the interest rates, terms, and payment structure for inheritance loans. The interest rates are the lowest enough rate for intermediaries to cover the costs of running and maintaining the loan.
Passing on to heirs
Heirs can use the loans to solve property problems by financing the purchase or amalgamation of property shares and financing costs related to a succession arrangement. This can also include costs and fees in connection with the purchase of shares from other heirs in joint property to clarify the title, as well as closing costs, appraisals, title research, surveys, preparation of documents, mediation and legal services.
Heirs are not allowed to use loans for land improvements, development purposes, the acquisition or repair of buildings, the acquisition of personal property, the payment of operating costs, the payment of a finder’s fee or similar expenses.
Heir property is a legal term that refers to family land that is inherited without will or legal proof of ownership. In the past, heirs have found it challenging to benefit from USDA programs because they believed they could not get a farm number without proof of ownership or control of the land. However, the FSA offers alternative options that allow an heir to receive an establishment number. In states that have passed the Uniform Partition of Heirs’ Property Act (UPHPA), producers can provide specific documents to obtain a farm number. To learn more about heir ownership, HPRP, or UPHPA, visit farmers.gov/heirs/relending.