Lenoir County landowners haven’t quite taken advantage of a Farm Service Agency loan program.
The Land Contract Guarantee Program is for landowners looking to sell their farm real estate to beginning or socially disadvantaged farmers, according to a press release for FSA.
The agency will make loans available to farmers who want to buy and operate large farms.
The program will reduce seller’s financial risk if something goes wrong with the buyer’s payments, and the buyer has to provide a five percent minimum down payment of the purchase price. They can pay in installments and the seller will still own the property until all payments are made.
Both parties will benefit under the program, which is designed as legally binding installment contracts paid like a rent-to-own property.
“The seller … is getting the guarantee that they’ll be paid,” said Clint Rideout, a FSA farm loan officer.
If the land situation doesn’t work out, 90 percent of what the buyer paid will be covered.
The guaranteed program is meant to be used for financing or purchasing a farm with an up to $500,000 new land contract. FSA must also approve buyers to make sure they are financially able to purchase and make payments on land.
Some requirements for purchasers include a sufficient plan to operate the farm land.
If ineligible, FSA won’t approve a contract.
“I think it’s a good program, but there’s just not a lot of interest,” Rideout said.
Jessika Morgan can be reached at 252-559-1078 or at jessika.morgan@kinston.com. Follow her on Twitter @JessikaMorgan.
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For more information about the Land Contract Guarantee Program, including criteria for borrowers, visit fsa.usda.gov.