The United States Department of Agriculture (USDA) is providing $ 67 million in competitive loans under the new Heir Property Loan Program (HPRP), which aims to help agricultural producers and landowners solve problems of land ownership and inheritance of heirs. Intermediary lenders – co-ops, credit unions and nonprofits – can apply for loans of up to $ 5 million at 1% interest during the two-month enrollment window, which has expired. open end of August.
Once the Farm Service Agency (FSA) has selected the lenders, the heirs can apply directly to these lenders for loans and assistance. Heir ownership issues have long been a barrier for many growers and landowners to access USDA programs and services, and this restitution program provides access to capital to help growers find a solution to these issues. .
According to the agency, the Heirs’ Property Relending Program is another example of how the USDA is working to rebuild trust with American farmers and ranchers. The HPRP is a loan and will need to be repaid in accordance with the guidelines of the 2018 Farm Bill.
The benefits of the program extend far beyond its participants. It will also keep farmland in use, protect family farming heritage and support economic viability.
To be eligible, intermediary lenders must be certified as a community development finance institution and have the experience and capacity to grant and manage agricultural and commercial loans of a similar nature.
The selected intermediary lenders will determine the rates, terms and payment structure for loans to heirs. The interest rates will be the lowest rate sufficient for the intermediaries to cover the costs of operating and maintaining the loan.
Restitution to heirs
Heirs can use the loans to resolve title issues by financing the purchase or consolidation of real estate interests and the financing costs associated with an estate plan. It may also include the costs and fees associated with redeeming fractional interests of other heirs in condominiums to clear title, as well as closing costs, appraisals, title searches, investigations, document preparation. , mediation and legal services.
The heirs cannot use the loans for land improvement, development, acquisition or repair of buildings, acquisition of personal property, payment of operating expenses, payment of research fees. or similar fees.
Heir property is a legal term that refers to family land inherited without a will or legal document of ownership. It has always been difficult for heirs to benefit from USDA programs due to the belief that they cannot obtain a farm number without proof of ownership or control of the land. However, the FSA offers alternative options that allow an heir to obtain a farm number. In states that have passed the Uniform Division of Heirs’ Property Act (UPHPA), producers can provide specific documents to receive a farm number. To learn more about heir ownership, HPRP, or UPHPA, visit farms.gov/heirs/relending.