USDA Announces Second Round of Debt Relief to "Distressed" Borrowers
USDA announced another $123 million in payments will be made in April under the Inflation Reduction Act (IRA) to provide debt relief for borrowers.
Focus for the second round of payments is on those who were:
• Past due on a qualifying direct loan as of Sept. 30, 2020, but by fewer than 60 days and are still delinquent
• Restructured a qualifying loan after Feb. 28, 2020, through primary loan servicing at FSA
• Owe more interest on a direct loan than the level of principal owed.
“In too many cases, the rules surrounding our farm loan programs may actually be detrimental to helping a borrower get back to a financially viable path. As a result, some are pushed out of farming and others stuck under a debt burden that prevents them from growing or reacting to opportunities,” said USDA Secretary Tom Vilsack. “Loan programs for the newest and more vulnerable producers must be about providing opportunity and tailored to expect and manage stumbles and hurdles along the way.”
According to Vilsack, this relief focuses on "long-term stability and success" of borrows that are in distress.
USDA's Other Aid
The agency is still working on the payments that are to go to farmers who suffered discrimination in FSA loan programs. This falls under some $3.1 billion in debt relief that was included in the IRA.
USDA in October 2022 released more than $800 million in automatic relief payments, the first tranche from the program. That money went to about 11,000 borrowers 60 days or more delinquent on Farm Service Agency loans and 2,100 borrowers who had their collateral liquidated but still owed. The agency has been paying out more complicated cases on a case-by-case basis.
