USDA's Farm Service Agency (FSA) has released the initial notice of funding availability (NOFA) for eligible borrowers with direct loans under the Farm Loan Programs (FLP) or Farm Storage Facility Loan (FSFL) programs authorized by the American Rescue Plan Act of 2021 (ARPA).
"FSA will pay 120% of direct loan balances outstanding as of January 1, 2021, for socially disadvantaged farmers and ranchers," the agency said. A subsequent notice addressing guaranteed loans and remaining loan balances will be published within 120 days of the initial NOFA that is expected to be published this week.
All eligible direct loan borrowers are included in the initial NOPA "except those who no longer have collateral or an active farming operation," FSA said. "These borrowers often have more complicated cases and may not have the same opportunities to invest in their farming operation to manage tax liabilities. FSA expects these cases to account for approximately 5% of eligible direct loan borrowers. Procedures for payments to these borrowers will be addressed in a subsequent NOFA, which also will include eligible guaranteed loan borrowers."
"Eligible Direct Loan borrowers will begin receiving debt relief letters from FSA in the mail on a rolling basis, beginning the week of May 24," FSA announced, with the agency indicating that effort will run through June. Those receiving the letters have to sign and return it to FSA. In June, FSA said it would begin to process signed letters for payment. "About three weeks after a signed letter is received, socially disadvantaged borrowers who qualify will receive 20% of their total qualified debt by direct deposit which may be used for tax liabilities or other fees associated with payment of the debt." Those payments will be issued on a "rolling basis," FSA noted.