Fair Credit for Farmers Act

Payment Relief for At-Risk Borrowers: The Secretary is required to defer payments of principal and interest on direct farm loans for eligible borrowers, including those who are delinquent or financially distressed, for a 2-year period (Section 2(b)(1)).

Lower Interest Rates: During the 2-year deferment period, the interest rate on remaining principal for direct farm loans is modified to 0.125 percent (Section 2(c)).

Fee Waivers for Specific Producers: Lenders of guaranteed farm loans must waive guarantee fees for covered producers, such as limited resource, socially disadvantaged, beginning, or veteran farmers and ranchers, for at least 2 years (Section 2(d)(1)).

Improved Transparency in Denials: When an adverse decision is made regarding a loan or program benefit, the Secretary must include a description of the reasons for the decision and a reference to relevant regulations or handbooks (Section 3(a)(1)(b)).

Protection of Primary Residences: The Secretary is prohibited from using a primary residence as the first option to achieve 100 percent collateralization of a loan; it must be the last option available (Section 3(a)(3)(B)).

Easier Access to Ownership Loans: The 1-year experience requirement for direct farm ownership loans can be waived for qualified beginning farmers or ranchers who have a mentor or other acceptable education/experience (Section 3(b)(1)).

Relief from Previous Losses: The Secretary is prohibited from restricting eligibility for farm ownership or operating loans based on a previous debt write-down or other loss (Section 3(f)).

Equitable Relief for Errors: Applicants may be eligible for equitable relief if they suffer due to an erroneous denial or if the Farm Service Agency reverses a decision after an official communication (Section 3(g)).

Shifted Burden of Proof in Appeals: For appellants with an adjusted gross income of $300,000 or less, the agency must bear the burden of proving that an adverse decision was not erroneous (Section 4(a)(1)(B)).

Limited Deferment Scope: The deferment of payments does not apply to direct farm loans that have a term of 12 months or less (Section 2(b)(2)).

Debt Extension: While payments are deferred, the maturity date and repayment period of the loans are extended by 2 years (Section 2(b)(1)(B)).