USDA's Farm Service Agency has expanded eligibility for farm credit lenders to participate in the Preferred Lender Program.  The change reduces the minimum number of farm loans made by a lender for eligibility in the program.

Lenders who have made 20 farm loans in the past five years now may apply.  Before, USDA required 30 loans in the past three years to qualify for the program.  The program simplifies procedures for lenders to obtain guarantees.  It is designed for experienced lenders with high volume and low losses.

A lender informs FSA of the institution's credit management system.  After FSA approval, lenders may use normal operating procedures and submit only a one page application with a loan narrative to FSA plus any additional items contained in the lender agreement.  If FSA does not respond to the guarantee request within 14 days, approval is automatic, subject only to funding.

FSA now guarantees repayment on about 65,000 farm loans to 40,000 farmers and ranchers.  Each year, the agency receives about 15,000 requests for new loans.  By reducing the application burden on lenders, FSA expects lenders will increase their requests for guarantees, making loans more accessible to farmers with difficulties obtaining adequate credit.

Agency Administrator Keith Kelly also urged Congress to approve the supplemental appropriations bill.  For the changes to be "fully effective, Congress must hold up their end of the loan...our funding authority both for guaranteed and direct loans has proven woefully inadequate, and farmers need our help more than ever."