USDA Extends Disaster Set-Aside for Direct Loans Until 2022

The USDA has extended the availability of COVID-19 Disaster Set-Aside (DSA) for installments due through Jan. 31, 2022. In addition, FSA will permit a second DSA for COVID-19 and a second DSA for natural disasters for those who had an initial COVID-19 DSA. Requests for a COVID-19 DSA or a second DSA must be received no later than May 1, 2022.

Last year, FSA broadened the use of the DSA. Normally used in the wake of natural disasters, the DSA can now allow farmers with USDA farm loans who are affected by COVID-19 and determined to be eligible to have their next payment set aside. The set-aside payment’s due date is moved to the final maturity date of the loan or extended up to 12 months in the case of an annual operating loan. Any principal set-aside will continue to accrue interest until it is repaid.

The USDA also announced a higher loan limit will be available for borrowers seeking guaranteed farm loans. The limit increased from $1.776 million to $1.825 million.

Farm loans offer access to funding for a wide range of producer needs, including annual operating and family living expenses, emergency needs, securing land, and financing the purchase of equipment. Guaranteed loans, which can be used for both farm ownership and operating purposes, are financed and serviced by commercial lenders. FSA provides up to a 95% guarantee against possible financial loss of principal and interest.

Producers can explore available options on all FSA loan options at fsa.usda.gov or by contacting their local USDA Service Center. Additionally, more information related to USDA’s response and relief for producers can be found at farmers.gov/coronavirus.


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