Minority and Women Farmers and Ranchers (Socially Disadvantaged Applicant) Loan (SDA)

_This program has been archived from the USDA's website with no further information provided. _

Loans to historically underserved and women farmers and ranchers are not a special type of loan program or loan type. Rather, this designation refers to a specific funding source known as Socially Disadvantaged Applicant (SDA) funding. To be considered for targeted funding, loan applicants must voluntarily provide race, ethnicity, and gender information.

You do not have to choose between identifying as an historically underserved individual or a beginning farmer, nor is there a "benefit" of deciding between one designation over the other. Identifying yourself as an historically underserved beginning farmer loan applicant is completely acceptable.

While FSA is committed to serving all farmers and ranchers, by statute, FSA targets a portion of all Guaranteed loan funds, Direct Operating and Direct Farm Ownership loan funds, Microloan funding, and Youth loans, to historically underserved farmers and ranchers, which include:

• Women

• African-Americans

• Alaskan Natives

• American Indians

• Hispanics

• Asians

• Native Hawaiians and Pacific Islanders.

To be considered for targeted "SDA" loan funding, loan applicants must voluntarily provide his or her ethnicity, race and/or gender on the loan application. Otherwise, the Agency's loan process and loan requirements are identical for all loan applicants. There is no difference between historically underserved and women applicants and those who do not fall under this funding allocation other than the availability of targeted funding.

This is a funding set-aside, not a separate loan product — you apply for ordinary FSA direct or guaranteed farm ownership (FO) and operating (OL) loans, and "Each fiscal year, FSA targets a portion of its direct and guaranteed farm ownership (FO) and operating loan (OL) funds to SDA farmers. Non-reserved funds can also be used by SDA individuals." Terms below are from FSA's August 2025 SDA fact sheet.

Repayment terms and rates (direct loans)

• "Repayment terms for direct OLs depend on the collateral securing the loan and usually run from one to seven years."

• "Repayment terms for direct FO loans vary but never exceed 40 years."

• "Interest rates for direct loans are set periodically according to the government's cost of borrowing." No rate figure is published in the fact sheet — check FSA's current rates page.

• "Guaranteed loan terms are set by the lender. Interest rates for guaranteed loans are established by the lender."

Down Payment Program (a special program for SDA and beginning farmers buying a farm) — the most concrete numbers FSA publishes here:

• "The applicant must make a cash down payment of at least 5 percent of the purchase price"

• "The maximum loan amount does not exceed 45 percent of the least of the purchase price of the farm or ranch to be acquired, the appraised value... or $667,000 (Note: This results in a maximum loan amount of $300,150)"

• "The term of the loan is 20 years. The interest rate is 4 percent below the direct FO rate, but not lower than 1.5 percent"

• "FSA can provide up to a 95 percent guarantee if financing is obtained from a commercial lender. Participating lenders do not have to pay a guarantee fee"

• The rest of the purchase must be financed with "an amortization period of at least 30 years" and "cannot have a balloon payment due within the first 20 years of the loan"

Land Contract Guarantees (seller-financed purchase from a retiring farmer)

• "The purchase price of the farm cannot exceed the lesser of $500,000 or the market value of the property."

• "The buyer must provide a minimum down payment of 5 percent of the purchase price of the farm. The interest rate is fixed at a rate not to exceed the direct FO loan interest rate in effect at the time the guarantee is issued, plus three percentage points."

• Two guarantee options: "Prompt Payment Guarantee: A guarantee up to the amount of three amortized annual installments plus the cost of any related real estate taxes and insurance" or "Standard Guarantee: A guarantee of 90 percent of the outstanding principal balance."

• "The guarantee period is 10 years for either plan regardless of the term of the land contract. The contract payments must be amortized for a minimum of 20 years. Balloon payments are prohibited during the 10-year term of the guarantee."

Inventory farmland: "Eligible SDA and beginning farmers are given first priority to purchase these properties at the appraised market value" within the first 135 days of advertisement; ties are broken randomly.

To be counted for targeted funding you must voluntarily report race, ethnicity and/or gender on the loan application — otherwise the loan process and requirements are identical. No overall maximum direct FO or OL loan amount appears in the SDA fact sheet; FSA's separate loan information chart carries those limits.

Loan Types:

• Direct Operating Loan

• Direct Farm Ownership Loan

• Microloan

For more info, contact your local USDA Service Agent

Helpful Links:

• Fact Sheet: Loans for Socially Disadvantaged Farmers and Ranchers (PDF, 547 KB)

• Direct Loan Making Handbook 3-FLP (PDF, 2.5 MB)

• Annie's Project

• Alaska Native Knowledge Network

• Intertribal Agriculture Council

• Latino Economic Development Center

• Minority Landowner Magazine

• National Hmong American Farmers

• National Women in Agriculture Association

• Farmers.gov