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USDA Debt and Discrimination Relief

On October 18, USDA made an announcement regarding the first of several phases of critical debt relief assistance to farmers. Here is a summary of what debt relief has already occurred and what farmers may expect next. 

To receive more breaking updates via text about the implementation of USDA debt and discrimination relief and how to access these programs, text the word “RELIEF” to our text line: 866.513.2803

Recently Implemented Debt Relief 

  • With funding through the Inflation Reduction Act (IRA) Section 22006, USDA has automatically applied $800 million to FSA direct and guaranteed borrowers who were classified as delinquent (60 days or more behind) to make their loans current AND cover the next annual payment for direct loan borrowers.  
  • Farmer borrowers who had their farms foreclosed on and still had remaining debt have had this debt resolved in order to end debt collections and offsets (a type of garnishment).

Upcoming Debt Relief

  • With remaining pandemic assistance funds, USDA will automatically provide payments to direct loan borrowers who used a disaster set-aside to delay their annual payment to the final maturity date of their loan. The relief assistance will cover the set-aside amount that remains outstanding.
  • Using two case-by-case processes, USDA will provide debt relief to borrowers with more complicated cases. 
    • 1) FSA will review and assist with complex delinquency cases, including cases involving bankruptcy or foreclosure. These farmers should receive notification from USDA if it applies to their case. As of October 31, notifications have not yet begun.
    • 2) Allow borrowers who are current but think they cannot make their next payment, to request direct loan relief assistance to avoid becoming delinquent. We anticipate that farmers will need to initiate this process with FSA and RAFI-USA will share more details when we have them.

Discrimination Payments Program: Under Construction

  • Under Section 22007 of the IRA, FSA loan borrowers may also be eligible for discrimination payments. USDA is currently seeking feedback on how this program should be structured to provide payments to farmers who have experienced discrimination through FSA’s lending process. Farmers should anticipate a longer process to set up this program before claims or payments can begin. Share your opinion with USDA on program structure here

NOTE: We are hearing currently that all of these debt relief and discrimination payments will be considered taxable income.  If you’ve received or expect to receive a USDA debt relief payment, consult your tax advisor on the best way to proceed for your personal situation.

Wondering if you’ve received debt relief already? 
Want to apply for upcoming debt or discrimination relief? 
Here’s what you can do next:

  1. Sign up for text updates from RAFI-USA regarding USDA debt and discrimination relief. To do so, text the word “RELIEF” to our text line: 866.513.2803
  2. If you have an FSA direct or guaranteed loan, call your local FSA office or guaranteed lender and ask for the current status of your loan.
  3. If you need further assistance with your case, call the RAFI-USA Farmer Hotline at 866.586.6746, Monday-Friday, 9:00 a.m.-6:00 p.m. 

Read More:

Inflation Reduction Act Section 22006 – USDA Fact Sheet

  • a full summary of USDA’s first phase of assistance for distressed borrowers

USDA Press Release – Oct 18 announcement

  • Press release regarding loan payments made and upcoming debt relief

USDA’s Request for Feedback – Federal Register for comments

  • Submit your feedback on how Section 22007 funds should be used to provide payments to borrowers who experienced discrimination in the FSA lending process. Due by November 14.
If you're a farmer facing hurricane damage, please check out our resources. You can also call our Crisis Hotline: 866.586.6746. Learn More