USDA Loan Modernization Act

Key Points

• This bill makes it easier for farmers to get federal loans by lowering the required ownership stake. Currently, a person or group usually needs to own more than half of a farm to qualify for certain USDA loans, but this change would allow those with exactly 50% ownership to apply.
• It expands who can get help with buying land, running daily operations, or recovering from emergencies. This includes 'operating-only' businesses where the person running the farm owns at least half of the company, even if they do not own all the land themselves.
• The plan also helps family farms that use complex business structures. If a farm is owned by a group of smaller companies, they can still get loans as long as 75% of the business is owned by the people actually doing the farming work.
• By updating these rules, the bill aims to reflect how modern farms are organized. Many family farms today use different legal setups for taxes or inheritance, and these changes ensure those farmers are not locked out of government support programs.

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