FSA loan agent reviews financing options for farmers Friday, 09 January :45

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1 Stevens County Farm Service Agency loan agent Will Schnittker talks about some of the various programs available for ag producers to finance expenses Wednesday morning at a Farm Bill meeting hosted by the Seward County FSA and K-State Research and Extension offices at the Activity Center. L&T photos/robert Pierce By ROBERT PIERCE Leader & Times 1 / 5

2 Ag producers learned about programs offered by the Farm Service Agency under the federal Farm Bill Wednesday morning at a meeting hosted by the Seward County FSA and K-State Research and Extension offices. One of the speakers at the event at the Activity Center, Will Schnittker, a farm loan agent with the Stevens County FSA office, talked about what farmers and ranchers can get in terms of financing for agriculture. Schnittker said the Hugoton office administers loan programs for beginning farmers, established farmers and people who need credit through FSA. Our loan program consists of approximately 150 direct borrowers, he said. We have approximately 44, 45 guaranteed borrowers that we work with banks on. In 2014, we processed approximately 109 applications out of the office. We lent around $11 million in program assistance for people. The majority of the loans made at Hugoton s FSA are for real estate purchase, according to Schnittker. We ve done a lot of those in 2014, he said. We ve done a lot of those in We also help people with farm equipment loans. We ve also financed some projects that involved construction. We re helping one family here in Seward County purchase an 80-acre tract. They re building a house on it, and we re purchasing the house for them. Stevens County s FSA office can also refinance debt. 2 / 5

3 If there s situations where you have some debt that would be advantageous for you to split with FSA at lower interest rates and lower retainment terms, we also have that available, Schnittker said. FSA does have a loan lending limit of $300,000, but Schnittker said there are ways where borrowers can get even more. If you re purchasing real estate, you can borrow up to $300,000, he said. If you re purchasing cows or equipment, you can borrow an additional $300,000. You can get a total of $600,000 from our program. Schnittker said that amount of money may not buy much real estate, but FSA does partner with banks. We have a program, he said. If somebody wants to buy real estate and it s irrigated and it s over $300,000, if the bank pays 50 percent of the loan, in exchange for the participation on that by the bank, we lower the interest rate two percentage points down to 2.5 percent. The Hugoton office takes care of eight counties in Southwest Kansas, in addition to Stevens County. Schnittker then talked about what FSA offers to beginning farmers. There s just such a huge emphasis on trying to get the younger people helped get started on farming, he said. We have the ability to do that because we can provide 100 percent financing without a down payment, no margins needed. That s who we loan to. For these loans, Schnittker added borrowers do not have to be turned down by a bank. You have to be established in farming and have a farm background, he said. You also have 3 / 5

4 to be willing to farm the ground after you buy it. We re not in business to help investors. We are in business to help people in production ag. In the 2014 Farm Bill, Congress established a micro-loan program, something Schnittker said makes getting money a little easier for producers. The micro-loan program is designed to help people borrow money by filling out one form, she said. It s a $50,000 or less program, so we don t use it very often, but we do use it. The most recent Farm Bill also established help for veterans who have served their country. They have streamlined the process for veterans to get a loan, Schnittker said. You can not only get a loan. There s preferential financing for you. The process goes quicker. The rate of approval is much better and faster. When veterans apply for a loan, they have a very good money to borrow money from FSA. Schnittker said there has been a lot of land selling in all of the counties Hugoton s office serves, and as that land is changing hands, people are seeing ground near theirs that they have opportunity to buy. We re directly involved with that, he said. We like being involved with our young people and helping them get started. These rates and terms that we re offering are unmatched by any bank. We re not taking the loans away from the banks, but we re sure giving a lot of people the opportunity to borrow money who ordinarily couldn t borrow money. One last point Schnittker hit on in his presentation was a new type of loan designed to help producers store grain on the farm itself. There s a trend toward more on-farm storage, and as we see people wanting to take advantage of pricing opportunities in January, February, March, April, deliveries of grain in bases of the 30-4 / 5

5 to 50-cent range actually pays for the facilities, he said. Schnittker said that trend will likely continue, and if it does, more farmers will take advantage of the loan program. There s been a lot of facilities put up with the program, he said. It s an easy program. We can walk you through the paperwork. It s easy to apply for. You don t have to be turned down by a bank for this program. Anyone can borrow. You have to meet a need, a justification for that. If it shows you are producing enough bushels to justify the facility you want to put up, it s very easy to qualify for, and I think we re going to be doing a lot more of these loans over the next five years to take advantage of this extremely low interest rate, he added. 5 / 5