To address the financial difficulties faced by distressed farm loan borrowers, comprehensive efforts have been implemented through the Inflation Reduction Act (IRA). With a significant funding allocation of approximately $6 billion, these initiatives aim to prevent foreclosures and provide relief to struggling producers. The IRA has been introduced as a replacement for the provisions initially established by the American Rescue Plan Act of 2021 and will remain active until the end of fiscal year 2031.
A substantial portion of the allocated funds, amounting to approximately $3.1 billion, has been designated to offer immediate assistance to at-risk borrowers enrolled in the Farm Service Agency (FSA) farm loan programs. This financial aid will be utilized for loan payments, loan modifications, and related costs to support distressed borrowers with direct or guaranteed loans administered by the FSA. Additionally, the U.S. Department of Agriculture has been granted $125 million to provide technical and other forms of assistance to borrowers.
The implementation of the IRA has already seen substantial progress, with the USDA having distributed nearly $1.5 billion in financial aid to assist over 20,000 distressed borrowers. These assistance measures encompass both automatic payments and personalized support, addressing the needs of different individuals and cases.
A range of borrower categories qualify for automatic payments, including FSA direct loan borrowers whose interest exceeds the principal owed, borrowers with outstanding debts up to 60 days past due as of September 30, 2022, and borrowers who have recently undergone loan restructuring.
The FSA is actively reviewing individual assistance requests from direct loan borrowers who have missed recent installments or anticipate difficulties in meeting upcoming payments. Borrowers are encouraged to engage with the FSA, following the provided process, which includes submitting a cashflow analysis based on a recent balance sheet and operating plan to determine eligibility.
The Inflation Reduction Act has allotted $2.2 billion in financial assistance for farmers, ranchers, and forest landowners who have experienced discrimination in USDA lending programs before January 1, 2021.
The USDA remains committed to providing updates regarding eligibility criteria as it gains further insights into the specific challenges faced by financially distressed farmers.
Source : wisconsinagconnection