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Creates a five-year USDA pilot program to test a pre-qualification or pre-approval process for direct farm ownership loans. The Secretary must establish the pilot within two years, may use alternative ways to evaluate borrower viability, prioritize outreach to groups that serve beginning farmers and ranchers, and report annually to Congress on the pilot’s results. The pilot is designed to improve access and predictability for prospective farm owners, especially new and beginning farmers and ranchers, while the Department tests different evaluation methods and collects data for Congress over the pilot period.
The Secretary must establish a 5-year pilot program to implement a pre-qualification or pre-approval process for direct farm ownership loans under subtitle A. The pilot must be established not later than 2 years after the date of enactment.
In carrying out section 360(b) for a participant in the pilot, the Secretary may use alternative methods, including financial benchmarking, to evaluate the participant’s financial viability and likelihood of loan repayment.
This section must not be interpreted to repeal any borrowing requirement imposed under subtitle A.
When conducting outreach about the pilot program, the Secretary must prioritize outreach to organizations that have demonstrated engagement with beginning farmers or ranchers.
The Secretary must evaluate the pilot program on an ongoing basis.
Primary affected groups are prospective borrowers seeking USDA direct farm ownership loans, especially beginning farmers and ranchers. The pilot could make it easier for new entrants to know earlier whether they qualify, reducing time and cost to prepare full applications and helping with planning. Organizations that assist beginning farmers (technical assistance providers, training programs, nonprofits) will be engaged for outreach and may see increased referrals or program adjustments. USDA staff will need to design and run the pilot, adopt new evaluation approaches, and collect data for annual reports, which could require administrative changes or new tracking systems. Secondary impacts may include clearer evidence about alternative credit evaluation methods that could inform future, broader changes to loan policy. Because the provision does not appropriate funds or create permanent programmatic changes, any large-scale expansion or ongoing costs would require later legislative or budget action.
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Read twice and referred to the Committee on Agriculture, Nutrition, and Forestry.
Introduced March 10, 2025 by Peter Welch · Last progress March 10, 2025
Read twice and referred to the Committee on Agriculture, Nutrition, and Forestry.
Introduced in Senate