June 2024


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Monday, June 17, 2024

Land Contract Guarantee Program Launched Nationwide

Land Contract Guarantee Program Launched Nationwide

Center for Rural Affairs Offers Farm Bill Help Line to Assist Producers

Lyons, NE – The Farm Service Agency recently announced that the Land Contract Guarantee Program is now available nationwide.
The Land Contract Guarantee Program provides federal loan guarantees to retiring farmers and landowners who self-finance the sale of their land to beginning or socially disadvantaged farmers and ranchers.

“With land values continuing to escalate, beginning farmers and ranchers face ever greater challenges in gaining access to land,” said Traci Bruckner, Assistant Director of Rural Policy at the Center for Rural Affairs. “The program is designed to encourage private land contract sales by providing a degree of protection to the retiring farmer whose retirement savings is often in the land and farm.  This protection may be the incentive some need to take that step and self-finance the sale of their land to a beginning farmer and rancher.”

In order to be eligible for this program, a farmer needs to self-finance the sale of their land, and sell to either a beginning or socially disadvantaged farmer.

The buyer of the farm or ranch must be a beginning or socially disadvantaged farmer or rancher;  not be larger than a family farm (in which most of the management and labor is provided by family members); have an acceptable credit history demonstrated by satisfactory debt repayment; be the owner or operator of the farm or ranch when the contract is complete; and be unable to obtain sufficient credit elsewhere without a guarantee to finance actual needs at reasonable rates or terms.

Under this program, the seller of the farmland has two guarantee options:

  • A “prompt payment” guarantee that covers three amortized annual installments or an amount equaling three amortized annual installments; or
  • A standard asset guarantee that covers an amount equal to 90 percent of the outstanding principle of the loan provided that the seller obtains a servicing agent.

For either option, the loan guarantee stays in effect for 10 years.  The purchase price or appraisal value of the farm or ranch that is the subject of the contract sale cannot be greater than $500,000.  The buyer of the farm and ranch must contribute at least 5 percent as the down payment for the land.

Farmers and ranchers interested in this program should contact their local Farm Service Agency office.

Bruckner also encourages farmers, ranchers and others to call the Center for Rural Affairs’ Farm Bill Helpline with questions about the application process as well as other farm and conservation program options that beginning and established farmers and ranchers can access.  Producers can call (402) 687-2100 and ask for the Farm Bill Helpline or send an email to tracib@cfra.org.

Retiring land owners looking to find the right beginning farmer or rancher to sell or transfer their land to can also register for the Land Link Program.

The Center’s Land Link program matches beginning farmers looking for land with established landowners, increasing opportunities for new farmers while promoting good stewardship. The process includes retirement planning, new farmer financing, farm business, and environmental assessment in order to ease transitions of family operations from the retiring generation to the next generation of farmers and ranchers.

Parties specifically interested in participating in Land Link should call Virginia Wolking with the Center for Rural Affairs at (402) 687-2103 ext. 1017.

Established in 1973, the Center for Rural Affairs is a private, non-profit organization working to strengthen small businesses, family farms and ranches, and rural communities through action oriented programs addressing social, economic, and environmental issues.


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