Loan program transfers farmland to next generation
SPRINGFIELD — USDA Farm Service Agency (FSA) State Executive Director Scherrie Giamanco reminds landowners the Land Contract Guarantee Program is available to landowners who wish to transfer farm real estate to the next generation of farmers and ranchers.
The Land Contract Guarantee Program provides a new approach to landowners willing to sell their land to beginning or socially-disadvantaged farmers or ranchers because it reduces the seller’s financial risk if the buyer defaults on the contract payments. The buyer must provide a minimum down payment of 5 percent of the purchase price, plan to operate the farm, and demonstrate the ability to make the land contract payments.
The national program offers two options, one that guarantees up to three annual installment payments on the contract and one that guarantees 90 percent of the unpaid principal of the contract. Guarantees can be used for financing the purchase of a farm with a purchase price up to $500,000 on a new land contract.
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