The Farmers Home Administration is starting a new program to help Utah farmers obtain credit from local lenders, according to E. Lee Hawkes, FmHA director for Utah.
Called the Interest Assistance Program, it provides strong incentives for commercial lenders to make loans to farmers who otherwise would not qualify.Under the new program, FmHA will pay up to 4 percentage points of interest for farmers to help them qualify for FmHA guaranteed loans. "If a creditworthy farmer can't cash flow with a guaranteed bank loan at regular interest rates, we can pay part of that interest for him until he can," Hawkes said.
The percentage of interest FmHA will pay depends on the financial condition of the farmer. The agency will pay only the number of points necessary to help the farmer cash flow with a small reserve.
To assist farmers in time for the 1991 planting season, the new program was started a short time after it was signed into law.
Hawkes said the level of interest assistance will be adjusted each year, based on a review of the borrower's need for continued assistance. Also, a borrower must be able to project a positive cash flow, including a 10 percent debt-service reserve to qualify for assistance.
Additional information can be obtained by calling FmHA county, district or state offices.