USDA invests $208 million to support farmers in loan distress
USAgNet - 12/04/2023
The United States Department of Agriculture (USDA) has recently unveiled a crucial financial assistance package of approximately $208 million, targeting farm and emergency loan borrowers. This initiative is a part of the Inflation Reduction Act, an integral aspect of the President's Investing in America agenda, allocating $3.1 billion to support distressed farm loan borrowers.
Approximately $80 million is earmarked to cover delinquencies for about 210 borrowers with guaranteed loans flagged for liquidation as of November 30, 2023. An additional $128 million is designated for around 1,120 borrowers holding direct Emergency Loans as of the same date. This assistance is a proactive measure to prevent foreclosures and support farmers in financial distress.
Tom Vilsack emphasized the USDA's commitment to keeping farmers on their land, marking a departure from approaches seen in the 1980s' farm financial crisis. The USDA encourages lenders and borrowers to utilize the available program flexibilities to avoid foreclosing or liquidating farms.
Since the Inflation Reduction Act's enactment in August 2022, over $1.7 billion has been dispensed to assist more than 30,000 distressed borrowers, underscoring the USDA's long-term commitment to improving loan servicing and borrowing practices.
For borrowers who previously qualified for Inflation Reduction Act assistance, adjustments to payments may be made accordingly. Additionally, the FSA continues to accept individual requests from direct loan borrowers facing cash flow challenges or those who have taken extraordinary measures to avoid delinquency. All assistance requests must be submitted by December 31, 2023.
It's important to note that these payments, including those over $600, are subject to federal and state income taxes and will be reported to the IRS. Borrowers will receive a 1099 form from the FSA and are advised to consult tax professionals for guidance.
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