When a farm needs more credit than its bank will lend on its own terms, the bank can ask the USDA Farm Service Agency (FSA) to stand behind the loan. The bank still lends the money and collects the payments. FSA promises to cover up to 90% of any loss, and 95% in a few cases. To get that promise, the bank builds a file to FSA's rules, and FSA reviews it within 30, 14 or 5 days, depending on the lender's FSA status.
This guide is for anyone who builds, signs, reviews or pays for FSA guaranteed farm loans: ag loan officers, credit analysts, the person at the bank who coordinates FSA files, ag lending managers and chief credit officers at community banks, Farm Credit associations and credit unions. No background needed.
Imagine you are the one person at a community bank in north-central Kansas who handles the FSA paperwork, about six guarantee files a year. On the afternoon of Friday, October 9, 2026, the last of 42 documents arrives for Wes and Hannah Lindqvist, who farm 2,140 acres near Clyde and run a 184-cow herd.
They want a $780,000 line of credit for 2027 and a $236,000 term note to pay off last year's carryover, the part of last year's operating line the harvest did not repay. That is $1,016,000, with FSA asked to guarantee 90%, or $914,400. They need the line before December 15 to prepay seed and fertilizer at a 6% discount.
Your credit committee will not lend this without a guarantee. At the bank's own crop prices the farm's cash covers its loan payments 1.07 times, and bank policy asks for 1.25. FSA's floor is 1.00, so the plan passes there. But one form in the pile no longer covers the whole farm. The conservation certificate (form AD-1026) was signed on March 3, 2019 and lists only FSA farm number 3302. Since March 2026 the Lindqvists have also rented 320 acres on FSA farm 4471.
AD-1026 on file · signed Mar 3, 2019
Farms listed
3302 only
Acres covered
1,820
Farm 4471
Not listed
Tracts 2215, 2216
Not covered
FSA farm records · October 2026
Farms operated
3302 and 4471
Acres
2,140
Tracts 2215, 2216
Rented since March
Tract 2215
Highly erodible
320 acres uncertifiedUpdated AD-1026 signedbefore the file goes to FSA.
Two more things would send the file back. A prior lender's lien on the 2024 combine secures "all present and future indebtedness", and your term note takes a second lien behind it, which FSA's rules allow only if that lender limits its future advances. And the narrative still has no paragraph explaining why the bank will not lend without a guarantee. FSA's decision clock does not start until all of it is in.
Checking the file against FSA's rules before it leaves the bank catches all three: the certificate that misses a farm, the prior lien that can grow and the missing paragraph. Three requests go out on one morning, instead of three trips back from FSA.
What an FSA guarantee is, who qualifies, and what the lender must prove
The programs, the percentages, lender status, the application package, eligibility, feasibility, security, fees and limits, the 2024 to 2026 rule changes and the market, explained without selling anything. If you have never filed an FSA guarantee, start here.
01 · In plain words
How an FSA loan guarantee works: the bank lends, FSA backs most of the loss
Farms borrow every year. A grain farm borrows in winter to buy seed, fertilizer and fuel, and repays after harvest. It borrows again, for longer, to buy a combine or a quarter section of land. Most of that money comes from community banks, Farm Credit associations and credit unions, and they lend it on their own terms: so much cash flow per dollar of payments, so much equity, a clean credit report.
Some good farms fall short of those terms for a while. A young farmer has little equity. A drought year leaves a carryover balance. Low prices squeeze the margin. The bank would like to keep the customer but its credit policy says no. That is the gap the Farm Service Agency (FSA), part of the U.S. Department of Agriculture, was set up to fill. FSA can lend directly, or it can guarantee a loan the bank makes: if the farm fails and the bank loses money, FSA pays the bank most of the loss, usually 90% of it.1,2
The bank stays in charge. It takes the application, decides the terms, closes the loan, holds the liens, collects the payments and deals with trouble. FSA's own fact sheet says guaranteed loans "are the property and responsibility of the lender from the time of loan making, through loan servicing, until the loan is satisfied".2
In return for the guarantee the bank has to show FSA, in writing, that the farm and the loan meet a long list of rules in Title 7, part 762 of the Code of Federal Regulations: who may borrow, for what, at what rate, on what security, with what proof that the plan works.1
That proof is the application package, and building it is the work this guide is about. A bank that files a guarantee every week has the checklist in its head. A bank that files six a year rebuilds it every time, and FSA's decision clock does not start until the last item arrives.1
From the farm's request to the Loan Note Guarantee
The farm asks its bankThe Lindqvists want a $780,000 operating line for 2027 and a $236,000 term note to clear 2025's carryover.
The bank decides it needs a guaranteeAt the bank's own prices the plan repays 1.07 times, under the bank's 1.25 policy. The committee says yes only with FSA behind it.
The bank builds the file to FSA's rulesForty-two documents become an application, a narrative, a cash flow, eligibility checks and a lien position the rules accept. This is where a stale form or an open-ended prior lien is caught, or sent.
FSA reviews and decidesThirty days for a standard lender, 14 for a certified or preferred lender, counted from a complete file; then a conditional commitment, an approval with conditions the bank must meet at closing.
The bank closes, pays the fee and services the loanA lender certification, the closing report and a 1.5% fee on the guaranteed share; then annual reviews for the life of the loan.
Step 3 is the subject of this guide. The farm, bank and figures in the example are fictional.
The review clock, the credit-elsewhere test, self-certification and fees
The clock waits for the last page
FSA's 14 or 30 days run from a complete application, which includes the information for the environmental review. If the bank misses FSA's deadline for a missing item, the application "will be considered withdrawn".1
The bank must prove it would say no
Every guaranteed operating and ownership loan needs a "test for credit": the farm cannot get enough credit elsewhere without a guarantee at reasonable rates and terms.1 The narrative has to say why the bank itself will not lend unaided.
Preferred lenders now certify their own analysis
Since October 1, 2026, lenders in FSA's Preferred Lender Program certify creditworthiness, the test for credit, feasibility and security themselves, and FSA aims to answer in 5 calendar days.3
Fees are expected to cover the losses
In fiscal 2025 the guarantee programs ran at a negative subsidy rate: fees are expected to exceed losses. Defaults on $18.4 billion of guaranteed loans came to about $20 million in the year.4
Guarantee, lender status, feasible plan and FSA-2211, explained
Guarantee
FSA's promise to pay the lender its share of a loss on a loan the lender made, up to 90% or 95% of the loan.
Lender status
Standard eligible, certified or preferred. The higher the status, the less the lender sends and the faster FSA answers.
Feasible plan
A cash flow budget showing "sufficient cash inflow to pay all cash outflow": a repayment margin (cash available for loan payments divided by the payments due) of at least 1.00.5
FSA-2211
The Application for Guarantee: sixteen parts, A to P, signed by the applicants and the lender.6
Three loan types, four percentages: what FSA's guarantee covers on a real loss
In shortFSA guarantees operating loans, farm ownership loans and conservation loans made by commercial lenders. The guarantee covers a share of the loss on the loan, usually 90%, sometimes 95% or 80%. It pays after the lender has collected what it can from the security, and only if the lender kept to the rules.
Part 762 covers three kinds of loan.1 An operating loan pays for the year's inputs, livestock, equipment, family living, refinancing of operating debts and similar costs; it matures within 7 years, and advances on a line of credit must all be made within 5 years of the guarantee. A farm ownership loan buys or enlarges a farm, builds or improves buildings, conserves soil and water or refinances real estate debt; it can run 40 years. A conservation loan pays for practices in a conservation plan and can run 30 years.
A line of credit may pay this year's operating costs, but "under no circumstances" may it refinance carryover from a previous year. A carryover balance needs a term loan of its own, which is why the Lindqvist request has two notes.1
The percentage FSA guarantees, by case
The rule sets a ceiling and FSA picks the number: "The percent of guarantee will not exceed 90 percent based on the credit risk to the lender and the Agency both before and after the transaction."1
Certain loans get 95% automatically: a loan whose sole purpose is refinancing an FSA direct loan (weighted if only part is), a farm ownership loan in FSA's down payment program, an operating loan to a farmer with a down payment loan outstanding, an operating loan secured on land under tribal jurisdiction, and a loan to a qualified beginning farmer. Conservation loans are 80%, or 90% for a beginning farmer. Guarantees to certified and preferred lenders are never below 80%.1
Most guarantees stop at 90%; beginning farmers and FSA refinances get 95%
Maximum share of the loss FSA guarantees, by loan and borrower, October 2026
Operating or ownership loan, beginning farmeralso FSA direct-loan refinance, down payment program, tribal land95%
Operating or ownership loan, any other farmerthe usual case; FSA may set it lower90%
Conservation loan, beginning farmer90%
Conservation loan, any other farmer80%
Floor for certified and preferred lendersFSA will not go below it80%
A change older guides miss. Until July 10, 2025, loans to "socially disadvantaged" farmers also got 95%. USDA removed that designation from the farm loan rules on that date, so the 95% list now covers beginning farmers and the program cases above.7
What 90% means when a loan goes bad
The guarantee attaches to the loss on the guaranteed share. FSA pays "any loss sustained by such lender on the guaranteed portion", including the pro rata share of principal and interest, any loan subsidy due, and the share of secured protective advances.1 Late fees and default interest are outside it.1 Suppose, as an illustration, that the Lindqvist loan failed, the bank sold the crops, calves and machinery, and $200,000 of principal and interest was still unpaid. The guarantee would cover 90% of it.
On a $200,000 loss after liquidation, the bank keeps a tenth
An illustrative loss on a 90% guaranteed loan, before liquidation costs
FSA paysThe bank absorbs
$200,000 left unpaid$180K$20K
Illustrative · replace with your own numbers · FSA reviews the loss claim first and can cut or deny it for negligent servicing.
Show the numbers
FSA pays
The bank absorbs
$200,000 left unpaid
$180K
$20K
Two conditions make that promise real. The lender may not take separate security for its own unguaranteed share; "all security must secure the entire loan or line of credit".1 And FSA reviews every loss claim "to ensure that guarantee requirements have been met throughout the loan lifecycle". A file built carelessly at origination is the first thing a loss claim reviewer reads.3
03 · The rules and their dates
The rules behind an FSA guarantee, and what changed between 2024 and October 2026
In shortThe rules are in 7 CFR part 762, with definitions and loan limits in part 761. Three rules changed them in 2024, 2025 and 2026. The biggest change took effect on October 1, 2026: preferred lenders certify their own credit analysis, applications can go electronically, and appraisals start at $500,000.
FSA rewrote part 762 in February 1999, in the same rule that created the Preferred Lender Program. The 2026 edition of the Code of Federal Regulations prints it as of January 1, 2026; the September 2026 rule amends it from October 1.1,3 The statute behind it is the Consolidated Farm and Rural Development Act. A farm bill would change the statute, and none has passed in 2026 (section 10).
Five rule changes since February 2024 touch how a guarantee is made
Feb 23, 2024Lender volume thresholds relaxed
Certified status: 10 FSA loans closed in 5 years. Preferred renewals: 10.
Sep 25, 2024Program access rule
A repaid prior loss still counts in creditworthiness; balloons for working capital and savings.
Jul 10, 2025Race and sex preferences removed
The 95% guarantee for socially disadvantaged farmers ends.
Oct 2025FY2026 loan limit
$2,343,000, indexed each October.
Apr 17, 2026Model risk guidance replaced
SR 26-2, OCC Bulletin 2026-13 and FDIC FIL-15-2026 replace SR 11-7.
Sep 30, 2026Farm bill extension lapses
House and Senate bills would raise limits; nothing enacted.
What changed for a lender building a guarantee file
Change
Rule
What it means at origination
Delegated authority for every preferred lender (new 762.108)
91 FR 56741, effective October 1, 2026
Certify creditworthiness, the test for credit, feasibility and security against your own credit management system; FSA reviews other eligibility, purposes and environment, and aims to decide in 5 calendar days.3
Submit through any electronic means FSA designates; notices and requests may come back electronically. USDA says paper is still accepted.3,12
Real estate evaluations to $500,000 (762.127(c))
Same rule
Below $500,000 (or the federal threshold if higher) value real estate as you would for an unguaranteed loan; above it, a certified general appraisal no more than 18 months old.3,1
Crop insurance waiver removed (762.123(a)(2))
Same rule
At least catastrophic coverage on each crop of economic significance by closing; signing away disaster aid no longer substitutes.3
Annual analysis threshold to $500,000; unguaranteed advances documented instead of pre-approved (762.140, 762.146)
Same rule
Fewer submissions after closing, more weight on what the file shows when a claim is reviewed.3
95% for socially disadvantaged farmers removed (762.129)
90 FR 30555, July 10, 2025
Request 90% unless a listed 95% case applies; fee waivers follow the same change.7
Repaid losses still weigh on creditworthiness (762.120(a)(3)); balloons for working capital and savings (762.124(e))
89 FR 65020, September 25, 2024
Document credit history even when an old FSA loss was repaid; a balloon can be justified by building reserves.9
Fast Track is a direct-loan change. The same September 2026 rule made FSA's Application Fast Track permanent: 23% of direct-loan applicants qualified during the pilot and their applications moved about 8 calendar days faster. It applies to FSA's own direct loans. Headlines that put it beside the preferred-lender change can make it sound like a guaranteed-loan feature.3
04 · Lender status
Standard, certified or preferred: how a lender's FSA status changes the work
In shortAny regulated lender with farm lending experience can be a standard eligible lender. Certified and preferred status come with volume, loss-rate and training tests, last up to five years, and buy shorter files and faster answers. The status sets what you send, how FSA reviews it, and the clock.
A standard eligible lender (SEL) must have experience making and servicing farm loans, be examined by a state or federal regulator, keep losses within FSA's limits, have an office near the collateral, and not be debarred or delinquent on federal debt.1
A certified lender (CLP) must also meet a maximum loss rate, show "substantially complete and correct" applications and proper servicing, close a minimum number of FSA loans, be free of enforcement actions, and send its FSA staff to FSA training every year. A preferred lender (PLP) adds a written credit management system FSA accepts, covering credit policy, underwriting, exceptions, file management, loan reviews and the board's role.1 Status lasts up to five years and is never renewed automatically.1
Standard eligible
Send everything
The full package for the loan size, including three years of production history. FSA reviews it all and decides within 30 calendar days of a complete file.1
Certified
Send what FSA asks for
Keep the complete package in the file; FSA tells you which items to send. Certify that the rest are in your file. Decision within 14 days.1
Preferred
Certify against your own system
Application, narrative and the items in your PLP agreement. From October 1, 2026, certify credit, feasibility and security; FSA targets 5 days, and a missed 14-day clock means automatic approval.1,3
Preferred status cuts FSA's decision clock from 30 days to a 5-day target
Calendar days FSA has to approve or reject a complete application
Standard eligible lender762.130(a)(1)30 days
Certified lender762.130(a)(2)14 days
Preferred lender with delegated authority762.108(f), once environmental requirements are met; the 14-day automatic approval in 762.130 still applies5 days
How many loans it takes to earn and keep the status
FSA publishes the volume tests in the Federal Register. In February 2024 it lowered them, saying that "due to decreased loan demand" many well-established preferred lenders with "minimal to no losses" had lost status solely for lack of volume, and that the slower files that followed "results in delays for producers to receive their loan funds".8
A certified lender needs 10 FSA loans in five years; a new preferred lender needs 20
FSA guaranteed loans closed in the past five years, from February 23, 2024
New or renewing certified lenderwas 10 in total with 5 in the past 2 years10 loans
New preferred lender20 loans
Renewing preferred lenderalso former preferred lenders who lost status only for volume, if they reapplied within 180 days10 loans
A bank that files six guarantees a year clears the certified threshold with room to spare, and needs four years of that pace before it can apply for preferred status. FSA's April 2026 paperwork notice counts 5,072 respondents across the whole guaranteed program, lenders and farms together.13
05 · The application package
FSA loan guarantee requirements: what goes in the application, by loan size and lender status
In shortUp to $125,000, five items: the FSA-2211 application, a narrative with a servicing plan, a balance sheet, a cash flow budget and a credit report. Above $125,000 add six more. Certified lenders keep the full package and send what FSA asks for; preferred lenders send what their agreement lists. Every lender keeps the complete file.
Section 762.110 lists the package.1 For loans up to $125,000 (other than the short EZ Guarantee, available to most lenders up to $100,000), the bank submits the application form, a loan narrative "including a plan for servicing the loan", a balance sheet, a cash flow budget and a credit report. Above $125,000 it adds verification of income, verification of debts above an amount FSA sets, three years of financial history, three years of production history (standard eligible lenders only), the proposed loan agreements and, for construction, the plans, specifications and schedule.
A package of loans submitted together counts as one, and "a lender must not split a loan into two or more parts" to fall under the threshold. Every lender "must perform at least the same level of evaluation and documentation" it would for an unguaranteed loan of the same type and size.1
A certified lender keeps the whole package; FSA chooses what it reads
What the lender does with each item of a loan over $125,000, by status (762.110 and 762.128)
Not requiredKept in file, certifiedFSA says which to sendSubmitted
Standard eligibleCertifiedPreferredFSA-2211 applicationSubmittedSubmittedSubmittedNarrative and servicing planSubmittedSubmittedSubmittedBalance sheetSubmittedFSA says which to sendKept in file, certifiedCash flow budgetSubmittedFSA says which to sendKept in file, certifiedCredit reportSubmittedFSA says which to sendKept in file, certifiedVerification of income and debtsSubmittedFSA says which to sendKept in file, certifiedThree years financial historySubmittedFSA says which to sendKept in file, certifiedThree years production historySubmittedNot requiredKept in file, certifiedProposed loan agreementsSubmittedFSA says which to sendKept in file, certifiedEnvironmental informationSubmittedKept in file, certifiedKept in file, certified
Our reading of the sources1 · Preferred lenders submit whatever their PLP agreement lists; certified lenders certify that unsent items are in the file.
Show the numbers
Standard eligible
Certified
Preferred
FSA-2211 application
Submitted
Submitted
Submitted
Narrative and servicing plan
Submitted
Submitted
Submitted
Balance sheet
Submitted
FSA says which to send
Kept in file, certified
Cash flow budget
Submitted
FSA says which to send
Kept in file, certified
Credit report
Submitted
FSA says which to send
Kept in file, certified
Verification of income and debts
Submitted
FSA says which to send
Kept in file, certified
Three years financial history
Submitted
FSA says which to send
Kept in file, certified
Three years production history
Submitted
Not required
Kept in file, certified
Proposed loan agreements
Submitted
FSA says which to send
Kept in file, certified
Environmental information
Submitted
Kept in file, certified
Kept in file, certified
The FSA-2211 itself: sixteen parts, two signers
The current Application for Guarantee is revision 04-17-25. Its own instructions divide the work: "All Loan Applicants will complete Part A. If the Loan Applicant is an entity, they will complete Part B. If the Applicant is an individual, they will complete Part C. All Loan Applicants will complete Parts D, E, and F. Lender will complete Parts G through M." Co-applicants, entity members and cosigners complete Parts O and P, and FSA keeps Part N.6 A married couple applying together is a joint operation: one spouse completes Part C, the other Parts O and P.
Parts
Who
What they hold
A to D
Applicant
Type of operation; the entity or the individual; other information about the farm and its finances
E and F
Applicant
Eligibility answers and the certifications the applicant signs; optional race, ethnicity, sex and veteran status questions
G to I
Lender
The loan requested, the purpose of the funds, and the security: lien position, value, prior liens
J and K
Lender
Net cash flow with and without interest assistance; the short EZ Guarantee test
L and M
Lender
Environmental answers from a site visit, including whether the applicant has certified conservation compliance on form AD-1026; the lender's certification
N, O, P
FSA; co-signers
FSA's use; each co-applicant's or entity member's information and certifications
FSA estimates the form alone takes 2.5 hours to complete.6 The package behind it is the larger job; FSA publishes no estimate for it. Across every guaranteed-program form, FSA's April 2026 notice counts 97,897 responses a year averaging 1.28 hours each.13
06 · Who can borrow
Who can borrow with an FSA guarantee: the eligibility tests in 7 CFR 762.120
In shortEligibility is a list of short tests, each easy on its own: no prior loss to FSA, no delinquent federal debt, citizenship or qualifying status, legal capacity, acceptable credit history, no other credit available, a family-farm operator, conservation compliance. Each applies to everyone who will sign the note. The cost of missing one is a file that stops.
Test
Rule
What the file has to show
No loss to FSA
762.120(a)
No debt forgiveness on an FSA loan after April 4, 1996 (narrow exceptions for operating loans); a repaid loss can still weigh on creditworthiness
No delinquent federal debt; no unpaid federal judgment
762.120(b), (c)
A clear federal debt check for the applicant and everyone signing the note; tax debt is weighed in the cash flow instead
Citizenship
762.120(d)
U.S. citizen, U.S. non-citizen national or qualified alien; for an entity, a majority held by such members, with documents for non-citizens
Legal capacity; no false statements
762.120(e), (f)
Every borrower can contract; no misleading documents in past dealings with FSA
Credit history
762.120(g)
Debts repaid as they came due; isolated late payments beyond the borrower's control and thin credit are acceptable
Test for credit
762.120(h)
Cannot get enough credit elsewhere without a guarantee, after counting significant nonessential assets that could be sold
Family farm
762.120(i)–(k)
Operator of no larger than a family farm after closing; entity ownership and control rules
Controlled substances; crop insurance violations
762.120(n), (o)
Certifications by everyone signing the note
Conservation compliance
7 CFR 12.7
Form AD-1026 certifying no crops on highly erodible land without a plan and no converted wetlands, covering every farm operated
Why the conservation certificate trips up careful lenders
Any person applying for "a FSA direct or guaranteed farm credit program loan" must certify on form AD-1026 that they will not grow a crop on highly erodible land without an approved conservation system, or on a converted wetland, and that the loan will not be used to contribute to excessive erosion or wetland conversion.14
The form is filed with the FSA service center and stays on record, so a borrower may have signed one years ago. Part L of the FSA-2211 asks the lender to confirm that the applicant "has certified compliance on AD-1026 covering the period of the loan and filed AD-1026 with the applicable Farm Service Agency Service Center".6 When a farmer rents new ground, the old certificate may not cover it. In the example at the top of this page, the 2019 form lists one FSA farm and the 2027 plan farms two.
Who answers each question since October 1, 2026
Preferred lenders now certify the four credit questions; FSA still checks the rest
Who answers each part of an approval decision, by lender status, from October 1, 2026
FSA reviews the evidenceLender certifies, FSA decidesLender certifies
Standard eligibleCertifiedPreferredCredit historyFSA reviews the evidenceFSA reviews the evidenceLender certifiesTest for creditFSA reviews the evidenceFSA reviews the evidenceLender certifiesFinancial feasibilityFSA reviews the evidenceFSA reviews the evidenceLender certifiesSecurity and lien positionFSA reviews the evidenceFSA reviews the evidenceLender certifiesCitizenship, prior loss, federal debt and other eligibilityFSA reviews the evidenceFSA reviews the evidenceFSA reviews the evidenceLoan purposesFSA reviews the evidenceFSA reviews the evidenceFSA reviews the evidenceEnvironmental reviewFSA reviews the evidenceLender certifies, FSA decidesLender certifies, FSA decides
Our reading of the sources3,1 · Certified and preferred lenders may certify they hold the environmental documentation; FSA makes the environmental determination.
Show the numbers
Standard eligible
Certified
Preferred
Credit history
FSA reviews the evidence
FSA reviews the evidence
Lender certifies
Test for credit
FSA reviews the evidence
FSA reviews the evidence
Lender certifies
Financial feasibility
FSA reviews the evidence
FSA reviews the evidence
Lender certifies
Security and lien position
FSA reviews the evidence
FSA reviews the evidence
Lender certifies
Citizenship, prior loss, federal debt and other eligibility
FSA reviews the evidence
FSA reviews the evidence
FSA reviews the evidence
Loan purposes
FSA reviews the evidence
FSA reviews the evidence
FSA reviews the evidence
Environmental review
FSA reviews the evidence
Lender certifies, FSA decides
Lender certifies, FSA decides
The new certification puts the analysis in the preferred lender's name, and the lender answers for it later. It signs that it obtained the documents and did the analysis; FSA "will continue to thoroughly review loss claims to ensure that guarantee requirements have been met throughout the loan lifecycle, prior to any loss payment", and can revoke delegated authority for approving loans that do not meet FSA's requirements.3 The evidence behind a certification has to be in the file on the day it is signed.
07 · Feasibility
Testing feasibility: a farm's cash flow at defensible prices, worked through
In shortFSA's test is simple: the plan must cover every payment and family living, a margin of at least 1.00. The work is in the inputs. Prices must be "reasonable and defensible" and documented; yields come from three years of actual production, with a county average allowed for a declared disaster year. Here is the example's plan, worked through.
A feasible plan is a cash flow budget with "sufficient cash inflow to pay all cash outflow"; if the loan spans more than one cycle and this year is unusual, the lender also prepares a typical year.5
Section 762.125 adds the rules on inputs.1 Standard lenders base projections on the applicant's proven production and financial management, certified lenders on financial history. "Lenders must use price forecasts that are reasonable and defensible. Sources must be documented by the lender and acceptable to the Agency." Income from off-farm work must be "dependable and likely to continue". For existing farmers, "actual production for the past 3 years will be utilized."1
Step 1: price the plan with the bank's own deck
Wes Lindqvist's 2027 plan prices corn at $4.60, soybeans at $10.90, wheat at $5.85 and calves at $1,580. The bank's October price deck (the list of documented price forecasts its credit staff reviews every month) uses $4.30, $10.40, $5.55 and $1,520. Those deck prices are the example's sample data, documented as the rule requires. Real 2027 prices belong in your own deck, with their sources.
The bank's price deck takes $74,000 off the Lindqvists' crop and calf receipts
2027 receipts by enterprise at the borrower's prices and at the bank's October deck
Borrower's pricesBank's price deck
Corn, 820 acres × 158 bu$596K$557.1K
Soybeans, 760 acres × 46 bu$381.1K$363.6K
Wheat, 560 acres × 45 bu$147.4K$139.9K
Calves, 168 head$265.4K$255.4K
Fictional example from this guide · Cull cows, program payments and custom work ($94,300) are the same in both.
Show the numbers
Borrower's prices
Bank's price deck
Corn, 820 acres × 158 bu
$596K
$557.1K
Soybeans, 760 acres × 46 bu
$381.1K
$363.6K
Wheat, 560 acres × 45 bu
$147.4K
$139.9K
Calves, 168 head
$265.4K
$255.4K
Step 2: work down to cash available for term debt
Line
Borrower's plan
At the bank's deck
Gross farm receipts
$1,484,200
$1,410,212
Operating costs, including interest on the line
−$1,049,300
−$1,049,300
Off-farm income
+$52,400
+$52,400
Family living and taxes
−$104,000
−$97,000
Available for term debt
$383,300
$316,312
Term debt due, three notes
$295,557
$295,557
Repayment margin
1.30
1.07
The margin is cash available divided by term debt due: $316,312 ÷ $295,557 = 1.07, a surplus of $20,755. That clears FSA's floor of 1.00 and misses the bank's own unguaranteed policy of 1.25, which is the bank's test-for-credit argument in one line.
Step 3: find where it breaks
Every 10 cents on corn moves receipts by $12,956 (129,560 bushels). The surplus of $20,755 is used up when corn falls 16 cents, to $4.14. At $4.00 the plan pays 94 cents of each dollar due. A narrative that states the breakeven tells FSA how much room the plan has.
Corn below $4.14 makes the Lindqvist plan infeasible
Repayment margin at each corn price, other prices at the bank's deck
0.89$3.90
0.94$4.00
1$4.14
1.07$4.30 deck
1.14$4.45
1.2$4.60 borrower
Fictional example from this guide · Our arithmetic on the plan's figures: margin = ($316,312 + (price − $4.30) × 129,560) ÷ $295,557.
Show the numbers
Period
Value
$3.90
0.89
$4.00
0.94
$4.14
1
$4.30 deck
1.07
$4.45
1.14
$4.60 borrower
1.2
Step 4: apply the disaster-year rule to the yields
When "the applicant's production history has been so severely affected by a declared disaster that an accurate projection cannot be made", county average yields replace the disaster year if the farm fell below them. Where disasters hit at least two of the previous five years, the worst year may be dropped.1 The Lindqvists' 2024 wheat made 29 bushels an acre in a declared drought; the county averaged 44.
The county average for the 2024 drought lifts the wheat basis from 40.7 to 45.7 bushels
Lindqvist wheat yields, bushels per acre, and the year the rule replaces
47 bu2023
29 bu2024 as harvested
44 bu2024 at county average
46 bu2025
Fictional example from this guide1 · Three-year average 45.7 with the county figure, 40.7 without; the plan uses 45, rounded down.
Show the numbers
Period
Value
2023
47 bu
2024 as harvested
29 bu
2024 at county average
44 bu
2025
46 bu
The difference is 5 bushels on 560 acres, 2,800 bushels or about $15,500 of wheat at the deck price: three-quarters of the surplus. Leaving the drought year in would have taken the margin to about 1.02. Applying the rule correctly, and saying so in the narrative, is worth as much as the price deck.
08 · Security and liens
Security for a guaranteed loan: the 85% junior-lien test and future advance clauses
In shortTake the best lien you can get, on identifiable collateral, securing the whole loan. A second lien is acceptable only if total debt on the collateral is at most 85% of its value, and only if the first lienholder's documents cannot grow the debt ahead of you. Real estate is required for terms over seven years.
Section 762.126 sets the security rules.1 The lender must obtain enough security "to fully secure the loan" and take "the best lien obtainable". Collateral must be identifiable. Loans longer than 7 years need a lien on real estate. All owners of jointly owned security must sign. On a junior lien two tests apply:
The 85% test. "Junior lien positions are acceptable only if the total amount of debt with liens on the security, including the debt in junior lien position, is less than or equal to 85 percent of the value of the security."
The prior-lien test. When taking a junior lien, "prior lien instruments will not contain future advance clauses" (except for taxes, insurance and similar costs to protect the security), or cancellation, summary forfeiture or similar clauses, "unless any such undesirable provisions are limited, modified, waived or subordinated by the lienholder".
The Lindqvist term note takes a second lien on their machinery, valued at $1,126,000. Two prior lenders hold first liens on particular machines: $286,000 on the 2024 combine and draper head, and $116,600 on a 2021 planter and tractor. Total debt after the loan is $402,600 + $236,000 = $638,600, or 56.7% of value.
Debt on the Lindqvist machinery uses 57% of its value; the rule allows 85%
Machinery valued at $1,126,000, by lien
Prior liensNew term noteRoom under the 85% lineAbove the 85% line
Machinery, $1,126,000$402.6K$236K$318.5K$168.9K
Fictional example from this guide
Show the numbers
Prior liens
New term note
Room under the 85% line
Above the 85% line
Machinery, $1,126,000
$402.6K
$236K
$318.5K
$168.9K
The 85% test passes easily. The prior-lien test does not, at first: the combine lender's security agreement secures "all present and future indebtedness". Until that lender signs a limitation capping its lien at the current balance, the junior lien fails 762.126(e)(3) however much equity there is. The fix is a one-page letter, and it is cheaper to ask for before FSA asks.
Valuing the collateral
Collateral
What the rule asks
Primary chattel security (machinery, livestock)
A current appraisal, no more than 12 months old, at market value from public sales, by an experienced appraiser; none needed for $50,000 or less with strong equity; crops for annual production need one only when the guarantee is requested late in the year.1
Real estate, $500,000 or less
Value it as you would for an unguaranteed loan (an evaluation), from October 1, 2026; $250,000 before.3
Real estate above $500,000
An appraisal no more than 18 months old by a state certified general appraiser, to USPAP (the appraisal profession's national standards); restricted reports not accepted. FSA may accept an older one if the lender documents that the market, the property and its value held up.1,3
Real estate in the transaction
Environmental due diligence, such as the ASTM transaction screen (a short standard questionnaire on past uses of the land), and a floodplain and historic-site check.1
09 · Fees, rates, interest assistance and capital
What the guarantee costs and what it saves: fee, rate ceiling, interest assistance and capital
In shortThe fee is 1.5% of the guaranteed portion for most loans, set by FSA when the guarantee is obligated and allowed to be passed to the borrower. Rates are negotiated under a ceiling FSA publishes. Interest assistance is still in the rule but has had no new money in recent budgets. On the bank's side, the guaranteed portion carries a 20% risk weight.
The guarantee fee
The fee formula is in the rule: loan amount × percent guaranteed × the percentage FSA sets for the loan type, paid by the lender at closing, nonrefundable, and allowed to be passed on to the borrower and included in loan funds.1
FSA's October 2025 fact sheet puts it at "1.5 percent of the guaranteed portion of the loan" for most loans.2 The rule lets FSA adjust the fee each year, so check the current schedule before closing.1
No fee is charged on loans with interest assistance, loans that mainly refinance an FSA direct loan, and loans to beginning or veteran farmers in the direct Down Payment Loan Program or to beginning farmers in a qualified state program.1,7 On the Lindqvist request the fee is $1,016,000 × 90% × 1.5% = $13,716.
Each ten points of guarantee adds about $1,524 to the Lindqvist fee
Guarantee fee at 1.5% of the guaranteed portion of a $1,016,000 loan
The lender and borrower agree the rate, fixed or variable, and may price the guaranteed and unguaranteed portions differently. At closing neither portion may exceed the maximum rates FSA "established and announced" on its website.1 A 2013 rule tied those ceilings to published market indices (then three-month LIBOR or the five-year Treasury rate); the regulation now says only that FSA posts the maximums.15,1
Lender fees may be no higher than those charged to unguaranteed customers for similar loans, and late charges sit outside the guarantee.1 For scale: agricultural lenders in the Chicago Fed's Midwest district averaged 7.12% on farm operating loans in the second quarter of 2026.16
Interest assistance: in the rule, unfunded in recent budgets
Section 762.150 still describes interest assistance on new guaranteed operating loans: FSA pays the lender 4 percentage points of the interest for up to five years (two five-year periods for beginning farmers), on up to $400,000 of lifetime guaranteed operating debt, when a plan is feasible only with the help and debts exceed half of assets (beginning farmers excepted).1 FSA-2211 keeps a Part J for it.6
The money is another matter. The Budget Appendix shows no new loan level for subsidized guaranteed operating loans in any year from the fiscal 2019 actuals to the fiscal 2027 request, only small re-estimates of older loans.17,4 Ask FSA before building a plan that depends on it.
What the guarantee does to the bank's capital
Under the federal capital rules, "the portion of an exposure that is conditionally guaranteed by the U.S. government, its central bank, or a U.S. government agency" takes a 20% risk weight.18 On the Lindqvist loan, the $914,400 guaranteed portion counts as $182,880 and the $101,600 unguaranteed portion as $101,600.
A 90% guarantee cuts the loan's risk-weighted amount by 72%
The $1,016,000 Lindqvist loan under the standardized approach
Without a guaranteeWith a 90% guarantee
Risk-weighted amount$1M$284.5K
Fictional example from this guide18 · Applies to banks using risk-based ratios; a bank that has elected the community bank leverage ratio does not risk-weight its assets.
Show the numbers
Without a guarantee
With a 90% guarantee
Risk-weighted amount
$1M
$284.5K
The guaranteed portion can also be sold to investors while the bank keeps servicing it, which FSA's fact sheet describes as a way to reduce interest-rate risk and free funds for more lending.2
10 · Loan limits
How much FSA will guarantee: the indexed loan limit and the farm bill proposals
In shortOne borrower's guaranteed ownership and operating debt together may not exceed a limit set at $1.75 million for fiscal 2019 and raised every October with the index of prices farmers pay. FSA's October 2025 fact sheet gives $2,343,000 for fiscal 2026. Bills in Congress would raise it to $3 million or more; none has passed.
Section 761.8 caps the outstanding principal of everyone who will sign the note, at closing: $1,750,000 for guaranteed ownership loans, the same for guaranteed operating loans, and the same for any combination of the two, each "for fiscal year 2019 and increased each fiscal year" by the change in the Prices Paid by Farmers index.5 Direct loans have separate limits ($600,000 ownership, $400,000 operating), and mixtures of direct and guaranteed debt have combined caps. If a borrower is over the limit at approval, the plan must show the debt coming down before closing.5
The guaranteed limit has grown from $1.75 million to $2.34 million; bills would take it past $3 million
Maximum outstanding FSA debt per borrower
Direct operating loans$400K
Direct ownership loans$600K
Guaranteed, fiscal 2019 base$1.8M
Guaranteed, fiscal 2026FSA fact sheet, October 2025$2.3M
Proposed guaranteed operatingAgricultural Act of 2026, Senate; not enacted$3M
The limit for fiscal 2027, which began October 1, 2026, is set the same way. FSA publishes it in its handbook and on its website, which we could not read for this guide; check the current figure with your FSA office before structuring a large request.
The farm bill is where the bigger change sits. The House passed the Farm, Food, and National Security Act of 2026 (H.R. 7567) on April 30, 2026, by 224 to 200,21 and Senate Agriculture Committee chairman John Boozman introduced the Agricultural Act of 2026 in June; the Senate bill raises the guaranteed limits to $3 million for operating loans and $3.5 million for ownership loans, and the Senate Agriculture Committee advanced its version in September.19,20,11
The latest extension of the 2018 farm bill expired on September 30, 2026; the Senate committee chairman expected talks to continue over the election break, which runs through the first week of November.11 An economics paper presented in July 2026 found that a share of guaranteed ownership loans has been made at exactly the maximum since 2012, a sign the limit binds.22
11 · Why files come back
Why guarantee files come back, and the rule behind each delay
In shortFSA publishes no count of returned applications. The rules show where files stall: anything missing from the package, missing environmental information, a certificate that misses a farm, a prior lien that can grow, prices nobody can source, a test for credit nobody wrote down. Each one stops the clock or turns into a question with a deadline.
What goes wrong
Why it happens
The rule
An item missing for the loan size or status
The checklist is rebuilt from memory; thresholds at $125,000 and status rules differ
762.110(c)–(e); incomplete after FSA's deadline = withdrawn, 762.110(h)
Environmental information missing
Site-visit answers left for later
No clock until it is in, 762.130(a)(3)
AD-1026 that misses a farm
New rented ground; an old form on file
7 CFR 12.7; FSA-2211 Part L
Prior lien with a future advance clause
Equipment dealers' and other lenders' forms secure "all indebtedness"
762.126(e)(3)
Prices without a documented source
The borrower's own prices carried into the bank's cash flow
762.125(a)(7)
Disaster year left in the yield history
Three years copied from the crop insurance reports
762.125(b)(6)
No reason the bank will not lend unaided
The decline lives in a committee note, not the narrative
762.120(h)
Debts missing from the balance sheet
Supplier accounts appear only on the credit report
762.110(c)–(d) verification of debts
Carryover put on the line of credit
One note is simpler to close
762.121(a)(2)(ii)
Loan split to stay under $125,000
To send a shorter package
762.110(a)(2)
Undisclosed relationship with the borrower
Directors or staff who farm, or hold stock
762.110(i)
Check first for the gaps that are common and hold a file longest
How long it holds the file →
Rare but costly: check every time
Fix first
Spot-check
Common, quick to clear
Missing environmental informationIncomplete packageAD-1026 misses a farmFuture advance clauseTest for credit undocumentedUndocumented pricesDisaster year left inDebt missing from balance sheetCarryover on the line
How often a file misses it →
Illustrative · replace with your own numbers · Positions are our judgment from the rules, for discussion; score your own last ten files.
Show the numbers
Item
How often a file misses it (0–1)
How long it holds the file (0–1)
Missing environmental information
0.45
0.78
Incomplete package
0.72
0.68
AD-1026 misses a farm
0.38
0.55
Future advance clause
0.28
0.62
Test for credit undocumented
0.60
0.36
Undocumented prices
0.40
0.27
Disaster year left in
0.20
0.16
Debt missing from balance sheet
0.66
0.20
Carryover on the line
0.14
0.72
The cost of a returned file is mostly time. FSA's own explanation for relaxing preferred-lender thresholds in 2024 was that longer files from lower-status lenders take "more time for FSA to review" and delay the farmer's funds.8 In the 2026 rule FSA added that even preferred lenders "have reported inconsistencies and delays in loan processing across FSA offices in certain cases".3
12 · The risks a lender keeps
The risks a lender keeps after FSA says yes
In shortLosses on guaranteed farm loans are small, and the guarantee covers most of them. The lender keeps four risks: its own unguaranteed share, a loss claim cut for poor origination or servicing, fair lending, and the oversight of any software or vendor it relies on.
$18.8B
of FSA guaranteed farm loans outstanding at September 30, 2025, of which $17.1 billion was guaranteed.4
Budget of the U.S. Government, FY2027 Appendix
$20M
of guaranteed loans ended in default during fiscal 2025, about a tenth of a percent of the balance at the start of the year.4
$17 million in claim payments and $3 million taken as loans receivable · our arithmetic
A negative rate means no appropriation is needed for the guarantees
Credit
The unguaranteed tenth
The bank carries 10% of every loss, on the same collateral, with no separate security allowed for its share. Compensating balances may not be used to eliminate it.1
Claim
A loss claim cut back
FSA reviews each claim for compliance from obligation to liquidation, and may reduce or deny it when negligent servicing or a skipped analysis contributed to the loss.3
Fair lending
The same rules as any loan
The lender "will not discriminate against any applicant" on the bases the Equal Credit Opportunity Act (ECOA) lists.1 The CFPB's April 2026 Regulation B rule removed disparate-impact liability from its reading of ECOA; disparate treatment remains unlawful.23 Agricultural lending is outside the rewritten Section 1071 rule, the CFPB's small-business lending data collection.24
Oversight
Software and vendors
SR 26-2, issued with OCC Bulletin 2026-13 and FDIC FIL-15-2026 on April 17, 2026, replaced SR 11-7, the banking agencies' earlier model risk guidance, and leaves generative AI to each bank's own framework.10,25 The 2023 third-party guidance applies, and a replacement was proposed on September 15, 2026.26
Status as of October 2026. A lawsuit against the 2026 Regulation B rule is pending; the rule is in effect.
13 · The market and the trend
FSA guaranteed lending by fiscal year, and why demand is rising in 2026
In shortGuaranteed obligations fell from fiscal 2020 to a low in 2023 and jumped in 2025: ownership loans up 41% to $2.1 billion, operating loans up 37% to $1.05 billion. The number of guaranteed loans outstanding fell by almost a third between 2022 and 2025 even as dollars held up. In 2026, Midwest lenders report more renewals and expect more FSA-guaranteed loans.
Guaranteed ownership and operating obligations hit a low in fiscal 2023 and jumped in fiscal 2025
FSA guaranteed loan obligations, actuals by fiscal year
Farm ownershipOperating
$0$1B$2B$3B$2.1B$1B
FY2019FY2020FY2021FY2022FY2023FY2024FY2025
Source17,27,28,29,30,31,4 · Guaranteed loan levels in the President's Budget Appendix for each later year.
Show the numbers
Farm ownership
Operating
FY2019
$2.1B
$1.1B
FY2020
$3B
$1.2B
FY2021
$2.7B
$781M
FY2022
$2.4B
$717M
FY2023
$1.4B
$616M
FY2024
$1.5B
$766M
FY2025
$2.1B
$1B
The dollars come from the Budget Appendix, which reports FSA's actual guaranteed loan levels two years later. Fiscal 2025's rise matches the American Farm Bureau's reading of FSA's data: guaranteed operating obligations up 37% and ownership up 41%, with the number of guaranteed operating and ownership loans up 21% and 24%; FSA made 2,291 guaranteed operating loans that year.20 That works out to an average of about $457,000 per guaranteed operating loan (our arithmetic).
Congress made room for more: fiscal 2026 appropriations allowed $3.5 billion of guaranteed ownership and $2 billion of guaranteed operating loans, and the fiscal 2027 request asks for $4.66 billion and $2 billion.4 FSA had not published a full fiscal 2026 total that we could read by October 31, 2026.
There are 31% fewer guaranteed loans on the books than in 2022
FSA guaranteed farm loans outstanding, count
FY2022FY2025
Guaranteed loans outstanding52,49035,984
Source13,29,4 · FSA, April 2026 paperwork notice. Dollars outstanding held about level over the same years ($18.9 billion at the end of fiscal 2022, $18.8 billion at the end of fiscal 2025, Budget Appendix), so the average loan is larger.
Show the numbers
FY2022
FY2025
Guaranteed loans outstanding
52,490
35,984
Why more farms need a guarantee in 2026
The Federal Reserve's district surveys describe the pressure. In the Chicago Fed's district, renewals and extensions of farm operating loans in the first quarter of 2026 reached their highest index reading since the second quarter of 2020, repayment rates fell for the tenth straight quarter, and lenders said 17% of their farm borrowers had more carryover debt than a year earlier. An Iowa lender reported that "cash flow projections for many operations are at or below breakeven for 2026".32
In the second quarter, the district's loan-to-deposit ratio hit 80.7%, the highest since the data began in the 1970s, and lenders expected higher volumes of operating loans and "loans guaranteed by the Farm Service Agency".16 The Kansas City Fed found credit conditions "continued to deteriorate gradually" in its district, with rates half a point below a year earlier.33
Midwest lenders saw more renewals and slower repayment through mid-2026
Chicago Fed survey indexes, Seventh District; 100 means no change from a year earlier
The loan officer, the analyst and the FSA coordinator: how a guarantee file gets built today
In shortAt a community lender the loan officer, a credit analyst and often one person who coordinates every FSA file share the work; a manager or committee approves; operations closes. Most of the hours go to sorting documents, rebuilding the cash flow and writing the narrative. Nobody publishes how long it takes; our estimate is about 40 hours of work spread over a week.
Officer, coordinator, analyst and approver on an FSA guarantee
LO
Ag loan officer
Owns the farm relationship, visits the farm (FSA requires an inspection before applying), and signs the FSA-2211 as the lender's officer.1
Cares about: the farmer's timing, such as an input prepay deadline.
FC
FSA guarantee coordinator
Builds the package, keeps the checklist, talks to the FSA farm loan officer, tracks the clock and the conditional commitment. At small lenders this is the loan officer.
Cares about: a file complete the first time.
CA
Credit analyst
Spreads the financials, rebuilds the cash flow at the bank's prices, applies the yield rules, runs the stress cases.
Cares about: prices and yields that can be defended.
AM
Ag lending manager or committee
Approves above the officer's authority, owns the lender's FSA status and its loss rate.
Cares about: keeping certified or preferred status.
OP
Loan operations
Closes the loan, perfects the liens, completes the lender certification and closing report, pays the fee.
Cares about: every condition in the commitment met before funding.
How a guarantee file changes hands on its way to FSA
A guarantee file changes hands five times before FSA decides
1Request and farm visit
The farm asks; the officer inspects the farm and decides a guarantee is needed.
Narrative with servicing plan; form filled and signed by applicants and lender.
Coordinator and officer
1 to 2 days
Approval and submission
Credit approval; the package goes to the county FSA office.
Manager, coordinator
1 day
FSA review
Questions with deadlines; decision; conditional commitment.
FSA farm loan staff
5 to 30 days from complete
Narrative, cash flow and the rest of an FSA file's hours
The narrative and the cash flow take almost half of a hand-built file
Hours for one guaranteed operating loan file by hand, by task
Sorting against the checklistEligibility, conservation and liensCash flow at the bank's pricesLender narrativeFSA-2211 and the package
By hand, about 40 hours6 hours12 hours8 hours10 hours4 hours
Illustrative · replace with your own numbers · An estimate for one file, not a measurement. Time your own last three files by task.
Show the numbers
Sorting against the checklist
Eligibility, conservation and liens
Cash flow at the bank's prices
Lender narrative
FSA-2211 and the package
By hand, about 40 hours
6 hours
12 hours
8 hours
10 hours
4 hours
Forty hours of work spread over a week of calls, other loans and waiting on documents is the common shape. The timing is set by the farm's calendar: operating lines are needed before input prepay deadlines in late fall and winter, which is also when FSA offices are busiest with direct loans and year-end.
Branch folders, one central coordinator or farm-finance packages
In house
The officer and a folder
The loan officer builds the file with a checklist and the bank's spreading tool. Works for a lender with steady volume; occasional filers relearn the rules each time.
Central desk
One coordinator for every branch
A specialist builds all FSA files and keeps the FSA relationship, at a bank, a Farm Credit association or a bankers' bank serving several community banks. The knowledge sits with one person.
Software
Farm-finance packages and document tools
Cash flow programs with FSA form outputs, plus document management and e-signature. They differ on whether they check the rules, read the documents and keep each figure tied to its source.
Part B · See it working
Botminds FSA Guaranteed Loan Origination, on one operating loan
Part A described the work without naming a product. This part shows how Botminds does it, at a fictional certified lender in north-central Kansas, on the Lindqvist request from the top of the page. Every bank, farm, person, document and figure on these screens is sample data; the price deck is the bank's fictional October deck.
15 · One file, start to finish
The Lindqvist file: from 42 documents to a complete application at FSA in one morning
In shortDana Reinholt, who builds every FSA file at Prairie Junction Bank & Trust, presses one button. Six agents fill the application from the 42 documents the bank already holds, link every value to its source, check FSA's rules as each part fills and draft the questions the file cannot answer. Three problems surface; all three are cleared the same morning; the loan officer and the ag lending manager sign.
1
Six files on the desk, one ready to build
Monday, October 12, 2026. The guarantee requests screen lists every FSA file the bank has open: a farm ownership loan already with FSA on day 10 of 14, a bison ranch's line ready for signature, a 240-acre purchase still four documents short. Lindqvist Family Farms has 42 of 42 documents, the last received Friday afternoon.
Above the list, the bank's own record: six of six files complete on first submission since August.
Guarantee requests. Every FSA file the bank is building, with FSA or closing: documents in, open items, stage and FSA's clock for each.
2
The application fills itself, field by field
Dana opens the application and presses Fill from the file. In a minute and a half, 35 of 39 fields fill from 21 of the documents, each with a link to where it was read. Three figures are marked corrected. Down the margin, FSA's rules are checked against each part as it fills: citizenship, legal capacity, family-farm operator, management experience pass; conservation compliance fails.
The pre-check at the top right says plainly: FSA would send it back today, for three reasons, each with the action that clears it.
The application, filled. The solution lays the request out in six parts with the rules checked in the margin. FSA's own FSA-2211 (revision 04-17-25) runs Parts A to P, and the balance sheet and cash flow travel beside it as package items.
3
Every value opens the line it came from
Dana clicks total liabilities. The side panel opens Wes's credit report on the exact line: a $47,300 account at Republican River Ag Supply that is not on the September 30 balance sheet. The cash flow agent added it, so total liabilities are $2,732,100 and the current ratio falls from 1.04 to 1.00. The change is marked, with the citation.
The same part shows the 2024 wheat yield replaced by the county average for the drought year, and the security part flags the prior lien on the combine.
A value and its source. Total liabilities, corrected for a supplier account found on the credit report; the current ratio and the disaster-year yield are corrected and cited the same way.
4
Two questions for the farmers, sent and answered
Two fields only Wes and Hannah can answer turn amber: the conservation certificate, which lists FSA farm 3302 and misses the 320 acres they rent on farm 4471, and FSA's optional demographic questions. Beside them a plain-words text is already drafted, with an updated AD-1026 attached for e-signature. Dana sends it. Hannah replies that both have signed and will skip the optional question.
The amber fields fill; 13 of 13 eligibility rules pass, and conservation compliance covers all 2,140 acres.
Signed by the farmers. The updated AD-1026 covers both farms; two items remain, both for the bank. The signed form still has to be filed with the county FSA office.
5
Two signatures, and the file goes complete
Dana requests the limitation from the combine lender, which signs a cap on its future advances at the $286,000 balance. She asks the assistant to write the credit elsewhere paragraph from the credit committee's October 8 note. With 14 of 14 checklist items complete, Cole Brandt signs the application; the request is above his $750,000 authority, so Lorraine Weiss, the ag lending manager, approves the credit. Dana submits to the county FSA office.
On the screen, FSA confirms receipt the same day.
Submitted complete. The screen dates FSA's receipt to Monday, October 12 and the decision to October 26. That Monday was Columbus Day, a federal holiday, so a county FSA office would date receipt Tuesday, October 13, and the 14 days would run to Tuesday, October 27.
The solution's design target is a complete application within one business day of the last document. In the sample file, the fill took a minute and a half and the open items cleared the same morning; measure both on your own files.
16 · Every screen
Behind the application: the checklist, eligibility, cash flow, lien, narrative and settings screens
In shortThe application is the front page of a case file. Behind it sit the checklist and the agents' run, eligibility rule by rule, the cash flow at the bank's prices, collateral and liens, the narrative, the operating plan, the conservation update, the signature and the bank's own settings.
The file answered 35 of the 39 fields; two questions went to the farmers and two items to the bank
Fields on the Lindqvist application after the first fill
39fields
Filled from the bank's file35
Questions for the farmers2
Items for the bank2
Fictional example from this guide
Show the numbers
Part
Value
Filled from the bank's file
35
Questions for the farmers
2
Items for the bank
2
The application file. The run log, step by step, and what is open before FSA's clock can start, each item with its rule and its evidence. The bank keeps three years of production history in its 14-item checklist; the rule requires it as a submission only from standard eligible lenders.
Eligibility, rule by rule. Each test with its reference and evidence, and conservation compliance checked tract by tract: 2,140 of 2,140 acres certified after the update.
Cash flow and feasibility. The borrower's projection beside the bank's deck, the breakeven, and a stress test on corn, soybeans, yields and the line rate.
Collateral and liens. Security by note, each prior lien from the lien search, the future advance clause now limited, and the 85% junior-lien test.
The lender narrative. Ten sections, every figure numbered to its document, each for the bank to approve or edit; the credit elsewhere section written from the committee note.
The farm operating plan. Each line at both sets of prices, with its source; wheat at the county average for 2024.
The AD-1026 update. Drafted from the 2019 form and the FSA farm records, with the new farm marked, for both applicants to sign.
Signing. The signature records its meaning; above the officer's authority the file routes to the manager.
The bank's settings. Lender status, service center, default guarantee, the 1.5% fee estimate and the price deck every file is tested against.
Select any screen to open it larger. Street addresses are left off the captures. The bank, farms, people and figures are fictional.
17 · Agents, and who signs
What each agent checks in an FSA guarantee file, and the officer and manager who sign it
In shortEach agent has one job and limits it does not cross. None of them decides eligibility, changes the borrower's plan, contacts FSA or submits anything. The loan officer signs the application; above the officer's authority the ag lending manager approves; FSA decides the guarantee.
From document sorter to package assembler: the FSA file agents
Document sorter
Reads every document in the file and files it against the FSA checklist for the loan size and the lender's status, reading dates, parties, farm and tract numbers and signatures.
Never accepts an unsigned or out-of-date form; every value cites its page.
Eligibility checker
Runs each applicant eligibility test and conservation compliance for everyone on the note, and checks purpose, term and loan limits, with the evidence and the rule reference.
Never makes the eligibility determination; it flags, and FSA decides.
Cash flow analyst
Rebuilds the borrower's cash flow at the bank's price deck, applies the three-year production rule with the disaster-year county average, and finds the margin, the breakeven and the stress results.
Never changes the borrower's plan; the two sit side by side.
Collateral and lien reviewer
Lists the security for each note, reads the lien search and every prior-lien statement, flags future advance clauses, runs the 85% test and reconciles the credit report with the balance sheet.
Never assumes lien priority without a search; a reconciliation change is always shown.
Narrative writer
Drafts the lender narrative and servicing plan, every figure cited to its document, and leaves a section open when the file does not support it.
Never writes a figure it cannot cite, and never sends.
Package assembler
Prefills the application, builds the package in FSA's order with its open-items list, routes signatures by credit authority, and watches FSA's clock after submission.
Never submits without both signatures, or with an item open.
Coordinator submits, officer signs the FSA-2211, manager approves credit
Builds and submitsFSA guarantee coordinatorRuns the fill, sends the questions to the farmers and the requests to other lenders, asks for the paragraphs the file cannot support, submits.
Signs the applicationAg loan officerSigns FSA-2211 for the lender with the meaning of the signature; to $750,000 of credit on his own authority.
Approves the creditAg lending managerApproves above the officer's authority, owns the price deck and the bank's FSA status; changes to settings are versioned.
Signatures record the name, the meaning, the time and the package version, and cannot be changed. Agent steps and human decisions are kept apart on the activity record, and nothing reaches a farmer, another lender or FSA until a person sends it.
Dana Reinholt's FSA desk: coordinator, officer, analyst, manager
Fictional, from the sample data
DR
Dana Reinholt · FSA guarantee coordinator
Builds every FSA file the bank sends, six this year, and owns the relationship with the county office.
"We do six a year, so every one starts from a blank checklist."
CB
Cole Brandt · ag loan officer
Nine years with the Lindqvists; signs the application.
"They need their line before the December prepay."
PS
Priya Sundaresan · credit analyst
Spreads the financials and builds the cash flow.
"If the price isn't defensible, FSA sends it back."
LW
Lorraine Weiss · ag lending manager
Approves credit above $750,000 and owns the bank's certified status.
"A file that goes back to FSA twice costs us the farmer."
18 · What goes in and out
What the solution reads from the bank's credit file, and the signed FSA package it leaves behind
In shortIt reads the documents the bank already holds, tests them against FSA's rules and the bank's own settings, and leaves behind a filled application with every field tied to its source, an eligibility pre-check with rule references, the cash flow at the bank's prices, a cited narrative, drafted questions and an open-items list. The bank's systems of record stay where they are.
From the farmer
Application, balance sheet and three years of returns
Cash flow projection and the farm operating plan
Production and acreage reports
Leases and the FSA farm records
AD-1026 and other certifications
From the bank
Credit reports, lien search and prior-lien statements
Credit committee notes and the proposed loan agreements
The price deck and policy margins
Lender status, approval limits and the fee estimate
Agents sort, check, fill and draftEvery document against 7 CFR 762 and the bank's own settings
The loan officer signs
Every field linked to its source
Outputs
The application, filled field by field, each field linked to its source
An eligibility pre-check with rule references
The cash flow at the bank's prices, with breakeven and stress
A cited lender narrative and servicing plan
Drafted questions for the farmer and requests to other lenders
The package in FSA's order, with open items and FSA's clock
What changes for the team
Gaps found before the file leaves the bank
Corrections shown with their reason
A checklist that never starts blank
Design targets: one-day assembly, every checklist item complete
1 day
to assemble a complete application from the last document, against our estimate of about a week by hand.
Design target, to be measured on your files
14 of 14
checklist items complete before FSA's clock starts: complete on first submission.
Design target
35 of 39
fields filled from the bank's file on the first pass in the sample file, each linked to its source.
Seen on the sample file, not a benchmark
Origination, document, spreading and bureau links for an FSA file
Loan origination systemThe request, approvals, the credit file
Document managementStatements, returns, leases, FSA forms
Spreading and cash flow toolsThe borrower's and the bank's budgets
Credit bureauCredit reports for everyone on the note
Lien searchState UCC search results
E-signatureForms the farmer signs
FSA submissionElectronic or paper, as the county office accepts
Identity and accessApproval limits, separation of duties
For each, check whether it has an API, a file feed or only screens, and who owns it.
The credit file read where it lives, nothing re-keyed
Your credit file
Read where it lives. Nothing is re-keyed; each value keeps a link to the document and line it came from.
Your price deck and policy
Become settings: prices, margins without a guarantee, approval limits, the fee estimate, the debt verification threshold.
Your cash flow tools
The borrower's projection stays as it is, beside the version at your prices.
Your FSA office
Gets the same package in FSA's order, complete, paper or electronic.
Your loan review
Gets files where each figure and each certification opens its evidence, which is what a loss claim reviewer reads first.
Your farmers
Get one plain message with exactly what is missing and a form to sign, instead of three phone calls.
Every field sourced, corrections shown, only FSA decides
1
Every field carries its source
Document and line, one click away, for the coordinator, the signer and the examiner.
2
Corrections are shown
A debt found on the credit report or a disaster-year yield is marked corrected, with the citation.
3
Only people sign, and only FSA decides
The agents prepare the file. Nothing goes to FSA without both signatures, or while an item is open.
Part C · Are you ready to automate?
Is automating the FSA guarantee package worth it for your bank?
You file FSA guarantees, or manage the people who do, or answer for your lender's FSA status. This part is written for you: what slow and returned files cost, what automating the package could return, whether your team is ready, and what to ask any vendor, including us.
19 · What slow and returned files cost
What a slow or returned FSA guarantee file costs your bank and the farm waiting on it
In shortStart from your own numbers. FSA publishes no figure for how often guaranteed applications go back, or how long lenders spend on them. Three published figures frame the cost: what a credit analyst's hour costs, how long FSA's clock runs once the file is complete, and how many farms are carrying debt into next year.
$57/hr
a credit analyst's time: the 2025 median wage of $40.15 an hour, grossed up by about 40% for benefits (our assumption; use your own).34
O*NET, Department of Labor · loaded cost illustrative
30 days
FSA can take on a complete file from a standard eligible lender; 14 from a certified or preferred lender. The days before the file is complete are on the bank.1
7 CFR 762.130
17%
of their farm borrowers, on average, had more carryover debt in 2026 than in 2025, Midwest lenders told the Chicago Fed.32
Chicago Fed AgLetter, May 2026
Our estimate: 40 hours a file by hand, 8 at the design target, with the narrative saving most
Hours for one guaranteed operating loan file, by task
By hand (estimate)With automation (design target)
Sorting against the checklist6 hours0.5 hours
Eligibility and conservation6 hours1 hour
Cash flow at the bank's prices8 hours1.5 hours
Collateral and prior liens6 hours1 hour
Lender narrative10 hours2 hours
FSA-2211 and the package4 hours2 hours
Illustrative · replace with your own numbers · Neither column is a measurement. Time your own last three files; measure the target in a pilot.
Show the numbers
By hand (estimate)
With automation (design target)
Sorting against the checklist
6 hours
0.5 hours
Eligibility and conservation
6 hours
1 hour
Cash flow at the bank's prices
8 hours
1.5 hours
Collateral and prior liens
6 hours
1 hour
Lender narrative
10 hours
2 hours
FSA-2211 and the package
4 hours
2 hours
What nobody publishes. There is no public figure for the hours a lender spends on a guarantee package, the share of applications FSA returns as incomplete, FSA's actual days to decision on guaranteed loans, or the farms a lender loses while a file waits. FSA's paperwork estimates, 2.5 hours for the FSA-2211 itself and 1.28 hours per response across the program, cover forms, not the work behind them.6,13
Reconstructing hours on your last three FSA files
Cost
Where it hides
How to find your number in a week
Staff time per file
Coordinator, analyst and officer hours spread over weeks
Ask the three people on your last three files to reconstruct their hours by task
Days to complete
From the request to the day FSA dates the file complete
Pull the dates from FSA's receipt letters and your loan system for the last ten files
Returned or questioned files
FSA's requests for more information, and their deadlines
Count FSA's information requests on your last ten files, and what each asked for
Farmers who went elsewhere
Lost to another lender or to FSA direct while the file waited
Ask your loan officers to name them; check last year's lost-relationship list
Status at risk
Certified or preferred status depends on accurate files and volume
Count loans closed in the past five years against FSA's thresholds; read FSA's last review of your files
Loss claim exposure
Gaps found only when a claim is reviewed
Re-check three closed files against the checklist and the certifications you signed
The missed prepay discount and the relationship that moved
The input discount the farmer missedIn the example, funding before December 15 is worth about $41,800 to the Lindqvists in prepaid seed and fertilizer.
The relationship that movedA farm that waits a month for its line may refinance with a competitor and take its deposits.
Status lost on volumeA lender that files too few clean guarantees drops a status level and sends longer files from then on.
Knowledge that walks outWhen the one person who knows FSA's checklist retires, the next file starts from scratch.
A claim reduced years laterA certification signed on a thin file is tested years later, when the loan fails.
20 · Your return
Where the return on an automated FSA package comes from: hours, timing, status and farms kept
In shortPut in your own numbers. The calculator values staff hours released and the relationships you keep, then subtracts what the tool and your testing cost. A lender that files a handful of guarantees a year will struggle to justify software on hours alone; the case grows with volume and with every farm a slow file would have lost.
Assembled packages, first-submission completeness and lender status
Staff time
A package assembled, not rebuilt
Documents sorted to the checklist, fields filled with their sources, the narrative drafted with citations.
files × hours saved × loaded hourly cost
Speed
Complete on the first submission
Gaps found at the bank, so FSA's clock starts on the first day and no request for information follows.
days from last document to a complete file, before and after
Relationships
Farms that stay
Operating lines in place before input deadlines; fewer farms lost to a competitor while a file waits.
relationships kept × yearly income per relationship
Status
Accurate files on record
Certified and preferred status rest on "substantially complete and correct" applications and enough volume.
files sent back by FSA ÷ files sent, by year
Claims
Evidence behind every certification
Each certified item opens its document, which is what a loss claim review asks for.
hours to assemble support for an FSA review or claim
Capacity
More guarantees without more staff
The same team takes the rising demand lenders expect in 2026.
guarantees filed per coordinator per year
Hours per FSA file at your filing volume
The hourly cost starts from the O*NET median wage for credit analysts, $40.15 an hour in 2025, grossed up for benefits.34 Every input marked illustrative is an assumption to replace.
Your volumeHours per fileRelationshipsYour cost
Illustrative yearly value
Staff time on packages today, valued$0
Staff time released, valued$0
Relationships kept, valued$0
After your yearly cost$0
Staff hours released a year0
Files a year to cover your cost on hours alone0
Formulas, per year: Staff time today = files × hours today × hourly cost Time released = files × (hours today − hours with automation) × hourly cost Relationships kept = relationships × yearly income per relationship After your cost = time released + relationships kept − yearly cost Break-even files = yearly cost ÷ (hours saved × hourly cost); a very large number means the hours saved never cover the cost
Defaults describe a lender filing about two guarantees a month: 40 hours by hand is our estimate and 8 hours is the solution's design target, neither measured. A bank filing six a year releases about 190 hours, roughly $11,000 of time at these rates; for it the case rests on speed, status and the relationships kept. Not counted: the farmer's input discount, status kept, claims protected. Released hours are value only when you decide what they are for.
At 32 hours saved a file, about 22 files a year cover a $40,000 yearly cost
Files a year needed to cover $40,000 of yearly cost on staff time alone, at $57 an hour
Saves 32 hours a file22 files
Saves 20 hours a file35 files
Saves 10 hours a file70 files
Illustrative · replace with your own numbers
Show the numbers
Hours saved
Files a year
Saves 32 hours a file
22 files
Saves 20 hours a file
35 files
Saves 10 hours a file
70 files
A Farm Credit association or a bank with several ag branches filing two dozen guarantees a year clears the first line. A community bank filing six a year does not on hours, and should weigh the input deadlines, its FSA status and the farms it keeps instead, or share the work through a central desk.
Start here21 · Readiness check
Nine questions that show whether your bank can automate its FSA guarantee files
In shortPick the answer closest to your team today. Eight questions score 0 to 2; the last is for reflection. The meter adds up your score as you go, and each question says why it matters and what a strong answer sounds like.
1
Volume
How many FSA guarantee files does your lender build in a year, across every branch?
Why it mattersVolume turns hours per file into a cost case. Below a dozen a year, speed and status matter more than hours.
A strong answer"About 30, operating and ownership, and rising with this year's carryover."
2
Lender status
What is your FSA status, and is it secure?
Why it mattersStatus sets what you send and the clock. Certified and preferred status depend on accurate files and on volume.1,8
A strong answer"Certified, renewing in 2027, with 14 loans closed in five years; we want preferred."
3
Your baseline
Do you know your hours per file, your days from request to a complete file, and how often FSA asks for more?
Why it mattersNo public benchmark exists for any of them, so your own baseline is the only way to prove an improvement.
A strong answer"About 35 hours, 18 days, and FSA asked for something on four of our last ten."
4
Checklist and price deck
Is your FSA checklist written down, and does credit publish a documented price deck?
Why it mattersSoftware applies your rules. FSA asks for price forecasts that are "reasonable and defensible" with documented sources.1
A strong answer"A written checklist by loan size and status, and a monthly deck from harvest futures less local basis."
5
Who knows the rules
If your FSA coordinator left tomorrow, could someone else build the next file?
Why it mattersOccasional work concentrates knowledge in one person. That is a risk with or without software, and a written checklist reduces it either way.
A strong answer"Two people can, and the checklist and past files are shared."
6
Files and systems
Are the borrower's documents, lien searches and credit reports in one place software can reach?
Why it mattersScans in email work but take longer to set up than a document system with an API.
A strong answer"In the document system by loan number, and the loan system has an API."
7
Owner and budget
Is there a named owner of FSA lending with a budget to change how files are built?
Why it mattersA guarantee file crosses lending, credit, operations and IT. Without one owner it stalls.
A strong answer"Our ag lending manager sponsors it and owns the FSA relationship."
8
Governance
Do you have a path to approve AI in credit work: vendor due diligence, a view on SR 26-2, named signers and an audit trail?
Why it mattersThe 2026 model guidance leaves generative AI to your own framework, and third-party guidance keeps responsibility with you.10,26
A strong answer"Vendor management has a path for AI tools, and every FSA certification has a named signer."
9
Vision · for reflection
If FSA reviewed a loss claim on one of last year's guarantees tomorrow, how long would it take you to show the evidence behind each thing you certified?
Why it mattersYour answer lists the gaps. Each gap is a candidate job for software: sorting, checking, citing or writing up.
A strong answerA short, specific list, for example: "every figure tied to its document, the price deck of the day, the lien search, and the signed AD-1026."
From a written FSA checklist to a planted-gap pilot
0–6
Explore
Write your FSA checklist by loan size and status, document your price deck, and time your next file by task. Share the knowledge beyond one person before buying anything.
7–11
Ready to pilot
Run a measured pilot on 10 to 20 of your own past guarantee files, with known gaps planted in copies. Compare catches, false alarms and hours with your current process, and keep your officers signing.
12–16
Ready to implement
Plan the desk: your checklist, price deck and limits as settings, signature routing, the link to your loan and document systems, e-signature for farmers, and how files reach the county FSA office.
22 · Questions for any vendor
Questions for a vendor of FSA guarantee application software, from rule versions to a planted-gap test
In shortAsk every vendor the same questions, us included. The answers show what the tool reads, which of FSA's rules it checks and how current they are, what evidence you keep, whose settings apply, and how you would test it on your own files.
Ask
A good answer
A warning sign
What it reads
Does it read the whole credit file, or only fields we type in?
Every document, each value with its document and line
A form you fill in by hand with better layout
Does it sort documents against 762.110 by loan size and our lender status?
Yes, and it says which items a certified lender keeps in file
One checklist for every loan
Does it cross-check documents: credit report to balance sheet, AD-1026 to farm records, lien search to the security schedule?
Yes, with both sources shown when they disagree
Each document read on its own
FSA's rules
Which version of 7 CFR 762 does it apply, and how did it take in the October 1, 2026 changes?
Dated rule set, with the 762.108 delegated authority and the $500,000 evaluation threshold
No date, or still a $250,000 threshold
How does it apply the disaster-year yield rule and the price rule?
County average per 762.125(b)(6), prices from our documented deck
The borrower's prices and yields carried through
Does it test junior liens at 85% and find future advance clauses?
Yes, from the prior lienholders' documents
Lien position typed in by the user
Who decides eligibility?
FSA; the tool flags with evidence and rule references
"Approved" shown on screen
Evidence
Can every field of the application and every figure in the narrative be opened at its source?
Document and line, for the officer, the manager and an FSA reviewer
A confidence score in place of a source
How are corrections recorded?
Marked, with the reason and the source, never silent
The corrected figure replaces the original
What does the record show after submission?
The package version, both signatures with their meaning, and FSA's dates
A PDF in a folder
Your settings and your people
Who can change the price deck, margins and approval limits, and is it versioned?
Named roles; versioned; applies to files started after the change
Any user, no history
Can anything reach the farmer, another lender or FSA without a person sending it?
No; drafts only
Automatic sending "to save time"
Your data and AI
Which AI models do you use, where do they run, and does our data train them?
Named models, a region you choose, no training on your data, in writing
"Proprietary AI", no more detail
How should we classify each part under SR 26-2 and our third-party program?
A component-by-component answer for your risk team
"It's all a model" or "none of it is"
Proof
Can we test it on our own past guarantee files, with gaps we plant, before we sign?
Yes, blind, with clean copies to count false alarms
Sample files only
What will you report from the test?
Gaps caught by type, false alarms, hours per file
One accuracy percentage
We found no published independent test of any FSA application tool, as of October 2026. A planted-gap test on your own files is the fairest comparison, and the same test measures your current process.
23 · How to start
A ten-week pilot that plants known gaps in copies of your own past guarantee files
In shortMeasure first, test on your own past files with gaps you planted, then run live files in parallel and decide with three numbers. None of these steps commits you to a vendor.
Time your next file by task, and pull dates and FSA's information requests from your last ten.
Write the checklist and settings down: items by loan size and status, the price deck, margins, approval limits.
Pick 15 past files across operating and ownership loans; copy five and plant known gaps in them: a stale AD-1026, a future advance clause, a missing debt, an undocumented price.
Run new requests in parallel for four weeks, with your officers signing every file and your coordinator submitting.
Decide with three numbers: gaps caught by type, false alarms on clean files, and staff hours to a complete package.
A ten-week pilot ends with a decision on three numbers
Your teamVendor
Time a file; pull ten past files' dates
Write checklist, price deck and limits
Load settings and connect documents
Choose 15 files; plant gaps in 5 copies
Run the test set blind
Parallel run on new requests
Score catches, false alarms, hours; decide
Week 0246810
Illustrative · replace with your own numbers
Show the numbers
Activity
From
To
Time a file; pull ten past files' dates
0
2
Write checklist, price deck and limits
0
2
Load settings and connect documents
1
3
Choose 15 files; plant gaps in 5 copies
2
3
Run the test set blind
3
5
Parallel run on new requests
5
9
Score catches, false alarms, hours; decide
9
10
Planted gaps caught, field accuracy and days at FSA
Measure
How
Why
Gaps caught by type
Planted gaps found ÷ planted, per type
One percentage hides the costly misses
False alarms
Flags on clean files, in reviewer minutes
A tool that flags everything catches every plant
Field accuracy
100 random filled fields checked against their sources
None wrong in 100 bounds the error rate below about 3%
Staff hours
From the last document to a signed package
The cost case rests on it
Days to complete at FSA
FSA's receipt date for a complete file, and any requests
The farmer's number
The full working-session questions: 12 questions in four groups
Bring ag lending, credit, operations, compliance, vendor management and IT into one room. Each question says why it matters, what a strong answer looks like and the warning sign.
A
Guarantees filed by branch, loan type and size
A1
How many guarantees did each branch file last year, by loan type and size?
Why it mattersSets the volume and where a central desk would help.
Strong answer · warning sign
Counts by branch and type.
"A few here and there."
A2
When does our certified or preferred status renew, and are we inside FSA's volume and loss thresholds?
Why it mattersStatus sets the package and the clock.8
Strong answer · warning sign
Dates and counts known.
Nobody has looked.
A3
Who signs, and at what amount does the file need a second approval?
Why it mattersLimits become settings.
Strong answer · warning sign
Written limits by role.
"It depends who's in."
B
The price deck, FSA's past requests and certified analysis
B1
Where is our price deck documented, and who reviews it?
Why it mattersFSA asks for documented, defensible prices.1
Strong answer · warning sign
A monthly deck with sources.
The officer's judgment.
B2
What did FSA ask for on our last ten files?
Why it mattersShows where our files stall.
Strong answer · warning sign
A list by type.
Nobody tracks it.
B3
If we are preferred, what does our credit management system say about feasibility and security now that we certify them?
Why it mattersDelegated authority rests on it from October 1, 2026.3
Strong answer · warning sign
Updated and approved.
Unchanged since it was written.
C
Where farm loan documents live and how files reach FSA
C1
Where do the documents for a farm loan live, and can software read them?
Why it mattersSets the integration work.
Strong answer · warning sign
One system, by loan number.
Officers' inboxes.
C2
How do we send files to the county office today, and will we use FSA's electronic submission?
Why it mattersFSA accepts electronic applications from October 1, 2026.3
Strong answer · warning sign
A plan for both.
Unknown.
C3
Do our farmers sign forms electronically?
Why it mattersAn AD-1026 update is a signature away.
Strong answer · warning sign
Yes, with an audit trail.
Drive out with the form.
D
SR 26-2, same-day files and steps people keep
D1
Has our model risk policy moved from SR 11-7 to SR 26-2?
Why it mattersThe old letter was replaced on April 17, 2026.10
Strong answer · warning sign
Updated, with a view on AI tools.
Still cites SR 11-7.
D2
What if every guarantee file were complete the day the last document arrived?
Why it mattersTests the appetite for a same-day standard.
Strong answer · warning sign
"We'd win the farms that need an answer before input season."
"FSA is the bottleneck anyway."
D3
Which steps would we never let software do without a person?
Why it mattersTells you where the signatures belong.
Strong answer · warning sign
Signing, certifying, contacting farmers and FSA, changing the price deck.
"All of it."
24 · Frequently asked questions
FSA guaranteed loans: frequently asked questions
In shortThe questions lenders and farmers search for most, each answered on its own.
What is an FSA guaranteed loan?
An FSA guaranteed loan is a farm loan made and serviced by a commercial lender, such as a bank, Farm Credit association or credit union, with the USDA Farm Service Agency promising to cover most of any loss. The guarantee lets the lender extend credit to farmers who fall short of its normal terms. The rules are in 7 CFR part 762.
What percentage does FSA guarantee on a farm loan?
FSA guarantees up to 90% of the loss on most operating and farm ownership loans, and decides the exact percentage based on the risk. It guarantees 95% for qualified beginning farmers, loans that refinance an FSA direct loan, down payment program loans and some loans on tribal land. Conservation loans are 80%, or 90% for beginning farmers, and certified and preferred lenders never get less than 80%.
What is the FSA guaranteed loan limit for 2026?
FSA's October 2025 fact sheet gives $2,343,000 as the guaranteed limit for fiscal 2026, covering a borrower's guaranteed operating and ownership debt together. The limit started at $1,750,000 for fiscal 2019 and rises each October with the Prices Paid by Farmers index. The limit for fiscal 2027, which began October 1, 2026, is indexed the same way, so confirm the current figure with your FSA office. Farm bill proposals would raise it to $3 million for operating loans and $3.5 million for ownership loans, but none had passed by October 31, 2026.
How long does FSA take to approve a guaranteed loan?
FSA must approve or reject a complete application within 30 calendar days for a standard eligible lender and 14 for a certified or preferred lender; if FSA misses 14 days on a preferred lender's file, the loan is approved automatically, subject to funding. From October 1, 2026, preferred lenders' complete applications are to be decided within 5 calendar days once environmental requirements are met. The clock starts only when everything, including environmental information, is in.
What is the difference between SEL, CLP and PLP lenders?
A standard eligible lender (SEL) is any experienced, regulated farm lender; it submits the full package and gets a decision in 30 days. A certified lender (CLP) meets volume, loss-rate and training tests, keeps the package in its file, sends what FSA asks for and gets 14 days. A preferred lender (PLP) also has an FSA-approved credit management system, submits a shorter package and, since October 1, 2026, certifies its own credit analysis.
What documents are needed for an FSA guaranteed loan application?
For loans up to $125,000 the lender needs the FSA-2211 application, a loan narrative with a servicing plan, a balance sheet, a cash flow budget and a credit report. Above $125,000 it adds verification of income and debts, three years of financial history, three years of production history for standard eligible lenders, the proposed loan agreements and any construction plans. The lender also supplies environmental information, and the applicant certifies conservation compliance on form AD-1026.
How much is the FSA guarantee fee?
For most loans FSA charges the lender 1.5% of the guaranteed portion, so a $1,016,000 loan guaranteed at 90% carries a fee of $13,716. That rate is from FSA's October 2025 fact sheet; FSA sets the fee when the guarantee is obligated and may adjust it each year. The fee is nonrefundable and may be passed on to the borrower and financed. It is waived for loans that mainly refinance an FSA direct loan, for down payment and qualifying state beginning-farmer program loans, and for loans with interest assistance.
Who is eligible for an FSA guaranteed farm loan?
Applicants must be U.S. citizens, non-citizen nationals or qualified aliens, have legal capacity and an acceptable credit history, be unable to get enough credit elsewhere without a guarantee, and operate no larger than a family farm after closing. They must not have caused FSA a loss through debt forgiveness, be delinquent on federal debt, or be barred for controlled substance or crop insurance violations. The tests apply to everyone who will sign the note.
What is the test for credit on an FSA guaranteed loan?
The test for credit asks whether the applicant can get enough credit elsewhere without a guarantee, at reasonable rates and terms, after counting any significant nonessential assets that could be sold. In practice the lender's narrative explains why the lender itself will not make the loan unaided, for example a repayment margin below its policy. Preferred lenders certify the test themselves from October 1, 2026.
What changed for FSA guaranteed loans on October 1, 2026?
FSA's "Driving Efficiency in Farm Loan Delivery" rule took effect. Preferred lenders now certify creditworthiness, the test for credit, feasibility and security, with a 5-day decision target; lenders may apply electronically; real estate evaluations replace appraisals up to $500,000; and borrowers must carry at least catastrophic crop insurance with no waiver option. Annual analysis and advance rules also eased.
Is FSA interest assistance still available on guaranteed loans?
Interest assistance is still in the regulation, 7 CFR 762.150: FSA pays the lender 4 percentage points of interest on a new guaranteed operating loan for up to five years, on up to $400,000 of debt. But the federal budget has shown no new loan level for subsidized guaranteed operating loans in any year from fiscal 2019 through the fiscal 2027 request. Ask your FSA office before counting on it.
What is form AD-1026 and why does it matter for an FSA loan?
Form AD-1026 is the certification that a farmer will not grow crops on highly erodible land without an approved conservation system or on converted wetlands. Anyone applying for an FSA direct or guaranteed loan must have one on file covering the farms they operate. A form signed years ago may miss land rented since, which stops an application until an updated form is signed and filed with the FSA office.
Can AI fill out an FSA guaranteed loan application?
Software can read the lender's credit file, fill most of the application, check FSA's rules and draft the narrative, and its accuracy should be measured before you rely on it. Ask that every filled field link to its source document, test the tool on your own past files with planted gaps, and keep people signing. FSA, not the software, decides eligibility and the guarantee.
25 · One-page summary
FSA guaranteed loan origination: one-page summary
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In shortThe whole guide on one screen: the method, the rules as of October 2026, the readiness bands and the terms.
The method
Document the test for credit: why your bank will not lend unaided.
Build the package for the loan size and your status; keep the complete file.
Check every eligibility test for everyone on the note, and an AD-1026 covering every farm.
Run the cash flow at a documented price deck; three years of yields with the disaster-year rule; margin ≥ 1.00.
Take the best lien; junior liens ≤ 85% of value; prior future advance clauses limited.
Write the narrative with every figure cited; sign; submit complete; watch the clock and the conditional commitment.
Readiness: score 0–2 on eight questions: 0–6 explore · 7–11 pilot · 12–16 implement.
As of October 2026: 91 FR 56741 in force from October 1, 2026 (delegated authority, electronic applications, $500,000 evaluations) · up to 90%, 95% for beginning farmers · fee 1.5% of the guaranteed portion · fiscal 2026 limit $2,343,000 · decisions in 30, 14 or 5 days · farm bill not enacted · SR 26-2 replaced SR 11-7.
14 terms
Guarantee
FSA's promise to pay the lender its share of a loss on a loan the lender made.
OL · FO · CL
Operating, farm ownership and conservation loans.
SEL · CLP · PLP
Standard eligible, certified and preferred lender status.
Delegated authority
A preferred lender's power, from October 1, 2026, to certify credit, feasibility and security.
FSA-2211
The Application for Guarantee, Parts A to P.
Loan narrative
The lender's written case for the loan, with a servicing plan.
Test for credit
Proof the farm cannot get enough credit elsewhere without a guarantee.
Feasible plan
A cash flow that covers all outflows: a margin of at least 1.00.
Price deck
The lender's documented price forecasts for crops and livestock.
AD-1026
The highly erodible land and wetland conservation certification.
Future advance clause
A lien term that lets the prior lender's secured debt grow.
Conditional commitment
FSA's approval, with the conditions the lender must meet before the guarantee issues.
Guarantee fee
1.5% of the guaranteed portion for most loans, paid at closing.
Interest assistance
A 4-point interest subsidy in the rule, unfunded in recent budgets.
26 · Sources
Sources
Accessed October 2026. Regulatory status statements are as of October 2026.
7 CFR part 762, Guaranteed Farm Loans, Code of Federal Regulations, 2026 edition (text as of January 1, 2026), as amended by 91 FR 56741 from October 1, 2026. govinfo.gov
Farm Service Agency, "Guaranteed Loan Program" fact sheet, October 2025. fsa.usda.gov
Farm Service Agency, "Driving Efficiency in Farm Loan Delivery", final rule, 91 FR 56741, September 4, 2026, effective October 1, 2026. federalregister.gov
Budget of the U.S. Government, Fiscal Year 2027, Appendix, Department of Agriculture: Agricultural Credit Insurance Fund accounts (fiscal year 2025 actuals). govinfo.gov
7 CFR part 761, Farm Loan Programs; General Program Administration (761.2 definitions, 761.8 loan limitations), 2026 edition. govinfo.gov
Farm Service Agency, Form FSA-2211, "Application for Guarantee", revision 04-17-25, OMB control number 0560-0155. forms.sc.egov.usda.gov
USDA, "Removal of Unconstitutional Preferences Based on Race and Sex in Response to Court Ruling", 90 FR 30555, July 10, 2025. federalregister.gov
Farm Service Agency, "Revised Loan Volume Requirements for the Preferred Lender Program and the Certified Lender Program", notice, 89 FR 13682, February 23, 2024. federalregister.gov
Farm Service Agency, "Enhancing Program Access and Delivery for Farm Loans", final rule, 89 FR 65020, August 8, 2024, effective September 25, 2024. federalregister.gov
Federal Reserve, SR 26-2, "Revised Guidance on Model Risk Management", April 17, 2026 (issued jointly with OCC Bulletin 2026-13 and FDIC FIL-15-2026). federalreserve.gov
R. Hanrahan, "Farm Bill Expires Again as Lawmakers Continue Negotiations", Farm Policy News, University of Illinois, October 2, 2026. farmpolicynews.illinois.edu
Farm Service Agency, "Information Collection Requests; Guaranteed Farm Loan Program", notice, 91 FR 22788, April 28, 2026. federalregister.gov
7 CFR 12.7, Certification of compliance (highly erodible land and wetland conservation, form AD-1026), 2026 edition. govinfo.gov
Farm Service Agency, "Maximum Interest Rates on Guaranteed Farm Loans", interim rule, 78 FR 13999, March 4, 2013 (amending 7 CFR 762.124 at 78 FR 14005). federalregister.gov
E. Kepner and D. Oppedahl, AgLetter No. 2013, Federal Reserve Bank of Chicago, August 2026. chicagofed.org
Budget of the U.S. Government, Fiscal Year 2021, Appendix, Department of Agriculture (fiscal year 2019 actuals). govinfo.gov
12 CFR 324.32, General risk weights (FDIC capital rule; the Federal Reserve and OCC rules match), 2026 edition. govinfo.gov
"Sen. Boozman introduces 'Farm Bill 2.0' with higher loan caps", Talk Business & Politics, June 23, 2026. talkbusiness.net
F. Parum, "Financing the Farm: A Look at USDA Farm Loan Programs", American Farm Bureau Federation, Market Intel, September 9, 2026. fb.org
Rural County Representatives of California, "House Passes Farm, Food, and National Security Act of 2026" (H.R. 7567, passed April 30, 2026, 224 to 200), May 1, 2026. rcrcnet.org
M. Mastrianni, S. Atkinson and C. Fiechter, "Bunching Around FSA's Guaranteed Farm Loan Program's Lending Limits", Agricultural and Applied Economics Association annual meeting, July 2026 (AgEcon Search 404345). ideas.repec.org
Consumer Financial Protection Bureau, "Equal Credit Opportunity Act (Regulation B)", final rule, 91 FR 21620, April 22, 2026, effective July 21, 2026. federalregister.gov
Consumer Financial Protection Bureau, "Small Business Lending Under the Equal Credit Opportunity Act (Regulation B)", final rule, 91 FR 23530, May 1, 2026. federalregister.gov
OCC, Federal Reserve, FDIC and NCUA, "Proposed Third-Party Risk Management Guidance", 91 FR 58536, September 15, 2026 (to replace the 2023 interagency guidance, 88 FR 37920; comments due November 16, 2026). federalregister.gov
Budget of the U.S. Government, Fiscal Year 2022, Appendix, Department of Agriculture (fiscal year 2020 actuals). govinfo.gov
Budget of the U.S. Government, Fiscal Year 2023, Appendix, Department of Agriculture (fiscal year 2021 actuals). govinfo.gov
Budget of the U.S. Government, Fiscal Year 2024, Appendix, Department of Agriculture (fiscal year 2022 actuals). govinfo.gov
Budget of the U.S. Government, Fiscal Year 2025, Appendix, Department of Agriculture (fiscal year 2023 actuals). govinfo.gov
Budget of the U.S. Government, Fiscal Year 2026, Appendix, Department of Agriculture (fiscal year 2024 actuals). govinfo.gov
D. Oppedahl and E. Kepner, "First Quarter Midwest Farmland Values Up Some from a Year Ago", AgLetter No. 2012, Federal Reserve Bank of Chicago, May 2026. chicagofed.org
T. Kreitman, "Steady Tightening of Agricultural Credit Conditions Persists", Agricultural Credit Survey, Federal Reserve Bank of Kansas City, August 14, 2026. kansascityfed.org
O*NET OnLine (U.S. Department of Labor), 13-2041.00 Credit Analysts and 13-2072.00 Loan Officers, median wages 2025. onetonline.org
Next step
See it on one of your own guarantee files.
Explore the solution, or bring a past FSA guarantee file and your price deck, and we will build the application with you, every field linked to the document it came from.
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