The U.S. Department of Agriculture announced novel financial aid to financially distressed Farm Loan Programs borrowers. This assistance is part of the $3.1 billion allocated under the Inflation Reduction Act's Section 22006 to aid struggling farm loan borrowers, according to an Aug. 11 news release.
"USDA continues to make progress on our goal to provide producers access to the tools they need to help get back to a financially viable path and ultimately succeed as thriving agricultural businesses," Agriculture Secretary Tom Vilsack said in the release. "The financial assistance included in today’s announcement will provide a fresh start for distressed borrowers with guaranteed farm loans and will give them the opportunity to generate long-term stability and success."
The USDA will provide new financial assistance to approximately 3,500 qualifying distressed guaranteed Farm Loan Programs borrowers, in an effort to support their financial stability and success in agriculture, the release reported.
Since the initial implementation of the Inflation Reduction Act in August 2022, USDA has given around $1.15 billion to more than 20,000 distressed borrowers, striving to facilitate farming and improve loan servicing, the release said.
The newly announced assistance aligns with previous aid to direct loan borrowers. It aims to help approximately 3,500 qualifying distressed guaranteed loan borrowers, though numbers might change as payments are finalized, according to the release.
Qualifying borrowers can receive assistance based on different criteria, such as paying outstanding delinquencies, payment for restructured loans or deferring certain amounts. The relief is offered to Farm Loan Programs guaranteed loan borrowers who haven't received earlier assistance, the release reported.
Recipients will get a Treasury check jointly payable to them and the lender. Opt-out instructions are provided, and tax implications are noted, as payments are reported to the IRS, according to the release.
"Borrowers receiving this assistance will receive a 1099 form from FSA. Please note that payments over $600 are subject to Federal and State Income Taxes and will be reflected on your annual 1099 form," the release reported.
