In an August 8^th announcement, Farm Service Agency Director, Zach Ducheanauex, outlined new rules “to make FSA more responsive to the needs of farmers at the beginning of a lending relationship”.  Going forward, the FSA will lower collateral requirements from 150 to 125 percent of direct loans and reconsider whether homes should be pledged as collateral.  The FSA will also establish a Distressed Borrower Set-Aside Program to allow a farmer to defer one annual loan installment per loan at a reduced interest rate. The FSA intends to support farmers with modified repayment terms appropriate to needs, including smaller interest-only payments.

The FSA is following its mission to support farmers, Accordingly the traditional banking criteria of Character, Collateral and Capacity are not strictly applied to all loan applications.  There is justifiable concern that FSA may be overreacting to justified criticism over discrimination inherent to the agency over many decades. This bias was recently reversed through deferred payments amounting to $2 billion to over 40,000 minority applicants.