Sponsors (3)
The bill seeks to speed and broaden loan access for beginning farmers via a 5-year pre-qualification pilot and alternative credit assessments, trading increased access and transparency against higher administrative costs, potential higher default risk, and continued regulatory barriers for some applicants.
Beginning farmers and ranchers would gain faster access to USDA direct farm ownership loans through a 5-year pre-qualification/pre-approval pilot, shortening application timelines and improving their ability to acquire land.
Farmers and applicants who lack traditional credit histories would have expanded ability to qualify for loans because the pilot allows alternative financial evaluation methods (e.g., benchmarking) to identify creditworthiness.
Underserved and new entrant producers would likely see higher participation because the pilot requires targeted outreach prioritizing organizations that work with beginning farmers.
Taxpayers and program participants could face higher loan defaults if alternative evaluation benchmarks misidentify creditworthiness and result in approving higher-risk borrowers.
USDA would incur increased administrative costs and staff time to design, run, evaluate, and produce annual reports on the pilot, potentially diverting resources from other programs and increasing costs for taxpayers.
Beginning farmers may still face barriers because the pilot maintains existing Subtitle A borrowing requirements, limiting the benefit for some applicants despite pre-qualification improvements.
Based on analysis of 2 sections of legislative text.
Creates a five-year USDA pilot to pre-qualify/pre-approve direct farm ownership loan applicants, allows alternative credit evaluation, mandates outreach and annual performance reporting.
Introduced March 10, 2025 by Peter Welch · Last progress March 10, 2025
Creates a five-year pilot program to let USDA pre-qualify or pre-approve applicants for direct farm ownership loans, with the Department required to set up the pilot within two years of enactment. The pilot allows alternative methods to evaluate borrower viability, keeps existing loan eligibility rules, emphasizes outreach to groups serving beginning farmers and ranchers, and requires ongoing evaluation plus annual reports to Congress with performance data and a recommendation on making the pilot permanent.