Source:  USDA 9/29/10

U.S. Department of Agriculture Farm Service Agency (FSA) Administrator Jonathan Coppess announced the expansion of the new Land Contract Guarantee Program.   The Land Contract Program was authorized under the 2008 Farm Bill, and will be available to Beginning Farmers and Socially Disadvantage Farmers nationwide.  
 
Under the Land Contract Guarantee Program, the seller may select either a Prompt Payment or Standard guarantee from the agency.
    
The program provides the seller of the land a 10-year "Prompt Payment" guarantee of the sale to the beginning farmer or rancher (buyer).  If the buyer does not pay an annual installment due on the contract, or pays only part of an installment, FSA provides the scheduled payment or the unpaid portion to the seller through an escrow agent.  The defaulted amount then becomes a federal debt for the buyer.  

The Standard Guarantee Plan is requested by the seller, the agency will provide a 90 percent guarantee of outstanding principal only to the seller.

Under the pilot program, the purchase price of the farm, ranch or other agricultural operation, or its current market value as determined by FSA, cannot exceed $500,000.  The interest rate charged to the buyer for the 10-year term of the guarantee cannot exceed FSA's direct farm ownership loan interest rate in effect at the time the guarantee is issued, plus three percentage points.  Contract payments must be amortized for a minimum of 20 years.  In addition, balloon payments are prohibited during the 10-year term of the guarantee.
The Proposed Rule is posted online at: www.fsa.usda.gov/Internet/FSA_Federal_Notices/flpmaking_09_23_2010.pdf

We invite you to submit written comments to this proposed rule and information collection. In your comment, include the volume, date, and page number of this issue of the Federal Register. You may also send comments about the information collection to the Desk Officer for Agriculture, Office of Information and Regulatory Affairs, Office of Management and Budget, Washington, DC 20503. You may submit comments by any of the following methods:

E-mail: connie.holman@wdc.usda.gov.
Fax: (202) 720-6797.
Mail:
Director, Loan Making Division (LMD), FSA, USDA, 1400 Independence Avenue, SW.,
Stop 0522, Washington, DC 20250-0522.
Hand Delivery or Courier: Deliver comments to:
FSA, LMD, 1280 Maryland Avenue, SW., Suite 240, Washington, DC 20024.