Cover photo for Inflation Reduction Act Assistance for Distressed Borrowers

Inflation Reduction Act Assistance for Distressed Borrowers

Farm Service Agency

On August 16, 2022, President Biden signed the Inflation Reduction Act (IRA) into law. Section 22006 of the IRA provided $3.1 billion for USDA to provide relief for distressed borrowers with certain Farm Service Agency (FSA) direct and guaranteed loans and to expedite assistance for those whose agricultural operations are at financial risk.   

USDA is implementing this provision with the goals of keeping borrowers farming, removing obstacles that currently prevent many borrowers from returning to their land, and improving the way that USDA approaches borrowing and loan servicing in the long-term. For many farmers, including those who have been hard hit by pandemic-induced market disruptions exacerbated by more frequent, more intense, climate-driven natural disasters, this assistance is vital if they are to continue producing the food, fiber, and fuel that are essential to the well-being of not only our rural communities but our Nation as a whole. 

USDA has allocated up to $1.3 billion for initial steps to help distressed borrowers. This includes both automatic and case-by-case assistance. In total, between the Inflation Reduction Act and pandemic assistance, about 35,000 distressed borrowers will benefit from assistance.


Qualifying borrowers will receive an individual letter detailing the assistance as payments are made. Eligibility for these new categories of automatic payments include: 

  • Assistance to direct loan borrowers who were past due on a qualifying direct loan as of September 30, 2022, but by fewer than 60 days, and remained delinquent on that loan as of March 27, 2023. The assistance will be equal to the amount of the delinquency and the next installment. 

  • Assistance to borrowers who restructured a qualifying direct loan on or after February 2020 through primary loan servicing available through FSA. The assistance will be equal to the next installment, not to exceed the remaining balance. 

  • Assistance to borrowers whose interest owed on their qualifying direct loan debt exceeds the principal owed (on a loan-by-loan basis). The assistance will equal the pending interest as of March 27, 2023.

Application Instructions

Contact your local FSA service center to inquire whether your are eligible for loan assistance.


Financial Instrument

Grant, Discount

Updated June 23, 2023

Image Credit: Artem Maltsev

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