On-Farm Labor Housing Loans

USDA Rural Development provides low interest loans to eligible borrowers to develop or rehabilitate affordable rental housing for very-low to moderate income domestic, migrant, and seasonal farm laborers. Borrowers must not otherwise be able to get commercial credit.

It also provides funding used to increase the supply of affordable housing for farm labor; and the ability of the farmer to provide affordable, decent, safe and sanitary housing for farm workers.

Housing may be multi-family or single family in type and may be located on the farm away from farm service buildings, or in the nearby community. On-farm labor housing may be used to serve migrant workers. Funds may be used to purchase and rehabilitate buildings that have not been previously financed by the Agency. For farm labor housing sections 514 and 516 only, funds may be used to purchase household furnishings.

• Individual farm owner

• Family farm partnership

• Family farm corporation

• Association of farmers

• The applicant must be a farm owner, family farm partnership, family farm corporation, or an association of farmers engaged in agricultural or aquacultural farming operations whose farming operations demonstrate a need for on-farm labor housing and who will own the housing and operate it on a nonprofit basis.

• Borrowers must not otherwise be able to get commercial credit.

• The applicant must agree to use the labor housing to engage in the farming operations of the individual farm owner applicant, or in the farming operations of its members if it is a family farm corporation or partnership, or an association of farmers.

• Employees of the owner that are domestic farm laborers, individuals who earn a substantial portion of their income from farm labor, retired domestic farm laborers, or disabled farm laborers. The families of eligible tenants also are eligible if they are not related to the owner.

• Occupants must be U.S. citizens or reside in the United States, Puerto Rico, or the Virgin Islands after being legally admitted for permanent residence, or a person legally admitted to the United States and authorized to work in agriculture.

• In addition, on-farm labor housing loan funds may not be used to provide housing for members of the immediate family of the applicant when the applicant is an individual farm owner, family farm corporation, family farm partnership, or a member of an association of farmers.

• There is no loan minimum

• The loan maximum is 100 percent of the allowable total development cost.

• The loan interest rate is 1.0% annually

• The loan term will not exceed 33 years

• Loan amortization for on-farm labor housing may be on a monthly or an annual basis.

• Grants are not available for on-farm labor housing

• Funding availability is on a first-come, first-served; or until funds are depleted basis.

• The security for the loan must include a lien on the tract of land where the on-farm labor housing is located and the security must have adequate value to protect the Federal government's interest.

• Personal liability and recourse will be required of all borrowers, including the individual members, stockholders or partners of an association of farmers, family farm corporations or partnerships, respectively.

Applications are being accepted for processing from eligible farm owners, corporations, associations or family farm partnerships or corporations on an ongoing basis. Applications are accepted on a first-come, first-served basis until funds are depleted.

To begin, contact a program official in your region to review the requirements for completing an application. The preparation process can take anywhere from a few weeks to several months, depending on the complexity of the application and the completeness of the materials provided.

All applications must be submitted electronically utilizing the “On Farm Labor Housing Package”. This application package is to be used as a guide for the requirements listed under 7 CFR Subpart M and a resource for completing and submitting application documents and forms. Once the application is submitted, Rural Development reserves the right to request further documentation if needed.

Applicants must submit an application in an Agency-approved format that adequately documents the need for the housing and the eligibility of the applicant.

• On-Farm Labor Housing Loans fact sheet

• 7 CFR 3560 Subpart M - On-Farm Labor Housing

• On-FLH workshop presentation slides (May 14, 2024)

• On-FLH workshop Q&As