H.R. 6169: Fair Credit for Farmers Act

The bill starts with breathing room. If you are delinquent or financially distressed on a direct USDA farm ownership, operating, or emergency loan, your principal and interest payments would stop for 2 years, and your rate would drop to 0.125% over that stretch. The loan's maturity date moves out 2 years to match. Direct loans with terms of 12 months or less are excluded.

Farmers who borrow through a private lender with a USDA guarantee get a narrower benefit. Beginning, veteran, limited-resource, and socially disadvantaged producers would have their guarantee fees waived for at least 2 years, which USDA could extend by another 180 days.

The next set of changes targets how USDA says no. A denial letter would have to list every reason the agency knew or should have known, cite the specific regulations and handbook instructions behind them, and explain how to look those up online. If a reason is left out, USDA could not later deny you on that same ground unless your circumstances have substantially changed.

Your house gets more protection. USDA could take your principal residence, plus up to 10 adjoining acres, as collateral only when your other assets fall short. Once those other assets cover 100% of what you still owe, the agency would have to start releasing the home on its own, with no request needed from you. It also could not demand collateral worth more than the loan itself.

The bill widens who can borrow. USDA could no longer refuse ownership or operating loans because of a past debt write-down, could no longer cap the number of years a farmer may use its loans, and could waive the 1-year management-experience requirement for beginning farmers who have an approved mentor or comparable education. Debt from outside lenders could be refinanced into direct USDA loans.

Finally, it changes what happens when you fight a decision. For appellants with adjusted gross income of $300,000 or less, USDA would have to prove by substantial evidence that its decision was not wrong, instead of you proving that it was. If an erroneous denial delayed you long enough to sink your original plan, you could qualify for equitable relief equal to the projected income minus projected expenses in your application.