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The USDA’s Farm Service Agency (FSA) will host a webinar TODAY, Tuesday, August 3, 2021, at 3PM (Eastern) about the recently-announced Heirs Property Relending Program (HPRP). Keep reading for more information.
As I wrote about last August in this blog, Section 5104 of the 2018 Farm Bill empowered FSA to give money to qualified intermediary lenders, including banks, cooperatives, credit unions and non-profit organizations, to then relend to producers and landowners to use to resolve issues related to heirs property. Once FSA opens the two-month signup window later this month, lenders can apply for loans for up to $5 million at 1% interest. Then, once FSA selects lenders, heirs can apply directly to those lenders for loans for assistance with things like clearing title.
HPRP is a loan and will need to be repaid as directed by the 2018 Farm Bill.
More information from the USDA is provided below.
WEBINAR INFO.
Today’s webinar is an opportunity for interested organizations and lenders to learn about the HPRP.
If you would like to attend the webinar, you may register in advance at: https://globalmeetwebinar.webcasts.com/starthere.jsp?ei=1485156&tp_key=ce6b49f0d6
After registering, you will receive a confirmation email with information about joining the webinar. You can also submit questions during the webinar through the Q & A box or by emailing fsaoutreach@usda.gov. Questions will be answered during the webinar.
A recording of the webinar will be made available afterwards at https://www.fsa.usda.gov/programs-and-services/outreach-and-education/webinars/index.
ELIGIBLE LENDERS
To be eligible, intermediary lenders must be certified as a community development financial institution and have experience and capability in making and servicing agricultural and commercial loans that are similar in nature.
If applications exceed the amount of available funds, those applicants with at least 10 years or more of experience with socially disadvantaged farmers that are located in states that have adopted a statute consisting of enactment or adoption of the Uniform Partition of Heirs Property Act (UPHPA) will receive first preference. A list of these states is available at farmers.gov/heirs/relending. Maryland has not adopted the UPHPA.
A secondary preference tier is established for those that have applications from ultimate recipients already in process, or that have a history of successfully relending previous HPRP funds. When multiple applicants are in the same tier, or there are no applicants in tier 1 or 2, applications will be funded in order of the date the application was received.
Selected intermediary lenders will determine the rates, terms, and payment structure for loans to heirs. Interest rates will be the lowest rate sufficient for intermediaries to cover cost of operating and sustaining the loan.
Additional information for lenders, including how to apply for funding, can be found in the HPRP final rule.
HOW MAY HEIRS USE THE MONEY
Heirs may use the loans to resolve title issues by financing the purchase or consolidation of property interests and financing costs associated with a succession plan. This may also include costs and fees associated with buying out fractional interests of other heirs in jointly-owned property to clear the title, as well as closing costs, appraisals, title searches, surveys, preparing documents, mediation, and legal services.
Heirs may not use loans for any land improvement, development purpose, acquisition or repair of buildings, acquisition of personal property, payment of operating costs, payment of finders’ fees, or similar costs.
WHO WILL BE ELIGIBLE FOR THE LOANS?
Intermediary lenders will make loans to heirs who:
Are individuals or legal entities with authority to incur the debt and to resolve ownership and succession of a farm owned by multiple owners;
Are a family member or heir-at-law related by blood or marriage to the previous owner of the property;
Agree to complete a succession plan.
More information on how heirs can borrow from lenders under HPRP will be available in the coming months.
MORE INFORMATION
Heirs’ property is a legal term that refers to family land inherited without a will or legal documentation of ownership. It has historically been challenging for heirs to benefit from USDA programs because of the belief that they cannot get a farm number without proof of ownership or control of land. However, FSA provides alternative options that allow an heir to obtain a farm number. In states that have adopted the UPHPA, producers may provide specific documents to receive a farm number. To learn more about heirs property, HPRP, or UPHPA, visit farmers.gov/heirs/relending.