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Understanding the Limited Resource Interest Rate [Agriculture] and Its Importance
Definition & Meaning
The limited resource interest rate is a lower interest rate offered by the Farm Service Agency (FSA) to applicants who are unable to secure financing at regular rates due to financial constraints. This rate is specifically designed for individuals seeking assistance through Farm Ownership (FO) or Operating (OL) loans, or for those requesting primary loan servicing on existing FO, OL, or Soil and Water (SW) loans. The goal of this program is to support farmers and ranchers who might struggle to develop a feasible financial plan under standard interest rates.
Table of content
Legal Use & context
The limited resource interest rate is utilized within agricultural financing, particularly in the context of federal loan programs administered by the FSA. It is relevant in situations where applicants demonstrate financial need and are unable to create a viable plan for loan repayment at standard interest rates. Users may encounter this term when applying for loans or seeking loan modifications, and they can utilize legal templates from US Legal Forms to navigate these processes effectively.
Key legal elements
Real-world examples
Here are a couple of examples of abatement:
Example 1: A small-scale farmer applies for an Operating Loan to purchase equipment but is unable to afford the standard interest rate due to low income. They qualify for the limited resource interest rate, allowing them to secure financing at a more manageable cost.
Example 2: A rancher with existing loans seeks primary loan servicing because their financial situation has changed, making it difficult to meet their current payment obligations. They apply for the limited resource interest rate to reduce their monthly payments. (hypothetical example)
Relevant laws & statutes
The limited resource interest rate is governed by regulations found in Title 7 of the Code of Federal Regulations, specifically 7 CFR 761.2. This section outlines the criteria and provisions for obtaining this interest rate through FSA programs.
Comparison with related terms
Term
Definition
Difference
Regular Interest Rate
The standard interest rate applied to loans without special provisions.
The limited resource interest rate is lower and intended for financially constrained applicants.
Farm Ownership (FO) Loan
A loan specifically for purchasing farmland or improving existing farms.
The limited resource interest rate can apply to FO loans for eligible applicants.
Common misunderstandings
What to do if this term applies to you
If you believe you qualify for a limited resource interest rate, follow these steps:
Gather your financial documents to demonstrate your need.
Contact your local FSA office to discuss your eligibility and the application process.
Consider using legal templates from US Legal Forms to assist with your application or loan servicing requests.
If your situation is complex, it may be beneficial to consult with a legal professional for personalized guidance.
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