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An unstable economy brings many changes for business owners across virtually every industry facet, including independent farmers. Rural areas have faced challenges throughout the years, from overcoming droughts to cleaning up after severe flooding. Aside from the natural weather conditions, there are other factors such as controversial pesticides and political or economic restrictions that affect the growth and sale of specific crops and livestock. The United States Department of Agriculture (USDA) closely monitors the farming and cattle industries and assists struggling areas with rural development plans. One of the latest efforts to support rural areas includes the USDA streamline loans program.


Loans for property in all US states and territories are eligible for assistance under the USDA streamline loans program. Farmers and agricultural workers who are having difficulty keeping up with high-interest loans or an excess of accumulated loans may find relief under the guidelines set forth under this new program. Existing loans can be consolidated and refinanced, usually with more favorable terms for the borrower.

The property in question must be the primary residence for the borrower in order to qualify for the USDA streamline loans. The property does not have to be located in a rural area, so unlike other programs, this new streamline loan will cover properties that may be ineligible for traditional refinancing attempts. The borrower requirements are somewhat more flexible than previous programs but the upfront fee (2%) and annual fee to guarantee the loan are (.40%) is in line with other options.


Because some of the criteria is the same for USDA streamline loans as other refinancing options there may be a question as to the overall benefits of this program. Anyone faced with making difficult financial decisions in a down economy will likely have anxiety and concerns about their total debt obligations. Informed consumers and borrowers will ultimately make better choices and feel confident about their decisions in the long run, so understanding the benefits and drawbacks of every choice is crucial.

While lender requirements such as closing costs, credit reports, and debt to income ratio analysis may be requested there are other factors unique to this program. For starters, most eligible states and territories have set up offices or committees specifically to address questions related to streamlining loan opportunities. Having dedicated contacts in place assures that borrowers can obtain accurate and timely information. The contacts also provided an additional layer of oversight and monitoring of local facilities such as lenders.

Borrowers may have several existing loans with variable interest rates that can quickly become too much of a burden when interest rates skyrocket. In turn, this could put farmers and ranchers in danger of losing their property. Streamlining loans may be one answer to this dilemma and allow property owners to extend the life of the loan up to thirty years with a fixed interest rate. Not only does this fixed-rate give agricultural workers peace of mind but also gives them a chance to improve the quality of life and control financial affairs.