USDA Temporarily Suspends Debt Collection, Foreclosures, and Other Activities | Around the city
Due to the national public health emergency caused by the 2019 coronavirus disease (COVID-19), the United States Department of Agriculture has announced the temporary suspension of overdue debt collections and foreclosures for distressed borrowers in under the Farm Service Agency (FSA) Farm Service Agency (FSA) On-Farm Storage Facility Loan and Direct-to-Farm Loan programs. The USDA will temporarily suspend non-judicial foreclosures, debt set-offs or wage garnishments and submit the foreclosures to the Department of Justice. USDA will work with the United States Attorney’s Office to end judicial foreclosures and deportations on accounts that were previously referred to the Department of Justice. Additionally, the USDA has extended the timelines for producers to respond to loan service measures, including consideration of loan deferral for distressed and delinquent borrowers. In addition, for the secured loan program, flexibilities have been made available to lenders to help them serve their clients.
Today’s announcement by the USDA expands on previous actions taken by the department to reduce financial difficulties. According to USDA data, more than 12,000 borrowers, or about 10% of all borrowers, are eligible for relief announced today. Overall, the FSA lends to more than 129,000 farmers, ranchers and producers.
“The USDA and the Biden administration are committed to providing relief and support to farmers, ranchers and producers of all backgrounds and financial circumstances, including ensuring that producers have access to temporary debt relief.” said Robert Bonnie, Deputy Chief of Staff Secretary. “Not only is the USDA suspending the pipeline of adverse actions that may lead to foreclosure and debt collection, but we are also working with the Departments of Justice and Treasury to suspend all actions already referred to the relevant agency. . Additionally, we are evaluating ways to improve and address farm-related debt with the goal of enabling farmers to continue earning their living expenses, meeting emergency needs, and maintaining cash flow.
The temporary suspension is in effect until further notice.
Secured loans are made and managed by commercial lenders, such as banks, the farm credit system, credit unions, and other non-traditional lenders. FSA guarantees the lender’s loan against losses, up to 95%.
Direct loans are made and managed by the FSA with funds from the federal government.
The most common types of loans are farm property, farm, and on-farm storage loans, with microloans for each:
Farm property: helps producers buy or expand a farm or ranch, build a new farm or improve an existing farm or ranch, pay closing costs, and pay for soil conservation and protection and the water.
Farm: Helps producers buy livestock and equipment and pay for minor property repairs and annual operating expenses.
Loans for on-farm storage facilities are provided directly to producers for the construction of cold or dry warehouses and include handling equipment and mobile storage such as refrigerated trucks.
Microloans: Direct Farm Ownership, Operating Loans, and On-Farm Storage Facility Loans have a shortened application process and reduced red tape designed to meet the needs of smaller, non-traditional, niche-type operations.