This page is meant to provide frequently updated answers to the questions many farmers are asking in the wake of the COVID-19 pandemic. If you have additional questions, please check out our ONLINE RESOURCE LIBRARY or contact us at email@example.com.
The Coronavirus Food Assistance Program 2 (CFAP 2) was announced on September 17th. It is open for applications between September 21st and December 11th. A total of $14 billion is available for payments to farmers and ranchers. The program is intended to cover losses from April to August (although dairy producers can also receive payments for estimated milk production through the end of the year).
In addition to extending the covered time period, the CFAP2 program contains several changes that should make the program much easier to use. In particular, there is an option for some producers to receive a payment based on their 2019 revenue, rather than having to try to calculate losses on a commodity-by-commodity basis. Although the program does not include a set-aside for beginning farmers or farmers of color, USDA has indicated that they are confident that all eligible producers will be able to receive funds regardless how quickly you submit your application.
If you have suffered from lost income or added costs due to the pandemic, we encourage you to learn more and apply to CFAP2.
BIPOC farmers can contact Shakera Raygoza, Young Farmers CFAP2 Technical Assistant at firstname.lastname@example.org for assistance with your application.
How are payments calculated?
USDA has created 3 categories of payments types.
Sales Commodities: Farmers of specialty crops (full list here), specialty livestock (full list here), floriculture and nursery crops (full list here), goat milk (details here), and aquaculture (full list here) will receive a payment based on their 2019 revenues for eligible products. The table below indicates the percent payment for each sales range. For example, if a producer earned had sales of $66,187, two payment factors apply: 10.6 percent (applied to the first $49,999 in sales) and 9.9 percent (applied to $66,187 minus $50,000, or $16,187 in sales).
Price Trigger Commodities: Generally, producers in this category receive a payment based on their production times a specific payment rate. For other livestock, the payment will be based on inventory between April 16 and August 31 and a set per-head rate.
For commodity row crops, the payment will be the larger of: (1) $15/acre or (2) a calculation of the producer’s weighted production history for 2020 times a specific payment rate.
For cow milk dairy producers, the payment will be a calculation based on both actual milk production between April 1 and August 31, and estimated milk production until December, multiplied by a payment rate.
Payments are limited to $250,000 for an individual to up to a maximum of $750,000 for a single operation that has 3 persons providing at least 400 hours of active personal management or personal active labor (organized as a corporation or an LLC, for example). You can download USDA’s payment calculator to see how much you could be eligible for here.
Who is eligible to apply?
Producers who are in the business of farming at the time of application can apply to CFAP2. Application for or receipt of funds from the CFAP1 program does not impact your eligibility for CFAP2.
Additionally, if this is your first year in farming, you are still eligible to apply using your 2020 revenue, acreage, or production.
There are also requirements around citizenship to be eligible for a payment. The following categories are eligible for CFAP2:
Resident Alien providing land, capital, and active personal labor in the farming operation
Partnership of U.S. Citizens
Corporation, Limited Liability Company, or other organization recognized under State law
Indian Tribe or Tribal Organization
Foreign Person providing land, capital, and active personal labor in the farming operation
Foreign Entity that has more than 10% of its beneficial interest held by individuals that are not US Citizens or Lawful Aliens
A beneficiary or heir of a trust or estate who has contributed at least 400 hours of active personal labor and/or active personal management to the farm operation
How do I apply?
If this program sounds like it could be helpful for your farm, there are several ways that you can go about completing your paperwork. You can apply online, by phone through a hotline, or with your local FSA office. If you have not received federal funding before, you will need to work with the Farm Service Agency to fill out eligibility paperwork. Among other things, these forms will make sure that you meet the adjusted gross income limits and environmental conservation requirements that are in place for all federal programs.
Note that you will not need to submit the documents that you use to fill out your application when you apply, but may need it for verification or a spot check at a later time. Examples of supporting documentation include: receipts, ledgers of income, income statements of deposit slips, veterinarian records, register tapes, invoices for custom harvesting, and records to verify production costs, contemporaneous measurements, truck scale tickets, or contemporaneous diaries.
Don’t forget to ask for a receipt for service, and to ask to fill out a form to indicate your demographic information so that we can understand how the program is benefitting beginning farmers and farmers of color.
To apply at your local FSA office, use the USDA’s Service Center Locator here.
You can use FSA’s call center for one-on-one support. Call 877-508-8364 to speak directly with a USDA employee ready to offer assistance. Customers will select 1 for English and 2 to speak with a Spanish speaking employee. For other languages, customers select 1 and indicate their language to the Call Center staff.
The first Coronavirus Food Assistance Program closed on September 11, 2020. You can find our archived updates below.
The latest from DC (8-20-20): Because of recent additions to Coronavirus Food Assistance Program (CFAP) eligible commodities, USDA’s FSA is now accepting applications from producers for aid through September 11th on a first-come, first-served basis. The list of eligible commodities, including price changes for some previously-included commodities and the removal of some commodities, are listed on the USDA CFAP website. On August 11th, USDA added many additional specialty crops, nursery crops, cut flowers, eggs, wool, and aquaculture to the list of products eligible for CFAP payments. Make sure to go to farmers.gov/cfap to check out the full list of products and the payments available to see if these changes could potentially work for your farm.
Unfortunately, the details of this program have previously made it challenging for many in our network to access. Payments will continue to be made on a crop-by-crop basis, will still only cover the period between January 15 to April 15, and do not have separate categories to take into account premium pricing from local or organic sales. There is also no set-aside for beginning farmers or farmers of color, and again funding is first-come, first-served.
Click here to apply. Thank you to our friends at the National Sustainable Agriculture for helping to answer key questions.
WHAT DOCUMENTS DO I NEED?
Producers do NOT need a previous relationship with FSA (past program participation, FSA farm number) to begin the application process. Documentation varies significantly by product and producers will need to retain records for 3 years. Documentation summary info:
Non-specialty crops (malting barley, canola, corn, upland cotton, millet, oats, soybeans, sorghum, sunflowers, durum wheat, and hard red spring wheat) or wool. 2019 production records and a record of what remained unsold as of January 15, 2020.
Livestock (cattle, hogs, and sheep)
Total sales of eligible livestock from January 15 to April 15, 2020, owned inventory as of January 15, including any offspring from that inventory, and highest inventory of eligible livestock between April 16 and May 14, 2020.
Certification of milk production for January, February, and March 2020.
Specialty crops: fruits, vegetables, mushrooms, beans, and/or nuts (full list of eligible products is at: https://www.farmers.gov/cfap/specialty). Sales records such as bills of sale, explanation of non-payment, or supporting documentation of unharvested product (e.g. acreage plowed under); depending on category applied for.
2019 production records and a record of what remained unsold as of January 15, 2020
Not yet specified on USDA website
Cut flowers and nursery crops
Not yet specified on USDA website
Eggs (liquid or frozen)
Not yet specified on USDA website
HOW ARE PAYMENTS CALCULATED?
In some instances–particularly for wool, cut flowers, livestock, and nursery crops–payments are given based on inventory or past revenue. You can use the USDA Payment Calculator to estimate your payment rates and to submit as part of your application.
Producers will now receive 100% of their total payment upon approval, and producers who had previously applied and received 80% of their payment should now be receiving the remaining amount automatically.
An abbreviated summary of the payment calculations is below. Click on the links to access USDA’s fact sheets for each category.
Number of livestock sold between January 15 and April 15, 2020, multiplied by the payment rates per head, plus the highest inventory number of livestock between April 16 and May 14, 2020, multiplied by the payment rate per head
Production between January 15 and April 15 times USDA payment rates
HOW TO APPLY:
Signup closes September 11, 2020. A CFAP Call Center is available for producers who would like additional one-on-one support with the CFAP application process at (877-508-8364). The USDA staff assisting you will also be able to help fill out and submit your paperwork over the phone. The CFAP Call Center can provide service to non-English speaking customers. Customers will select 1 for English and 2 to speak with a Spanish speaking employee. For other languages, customers select 1 and indicate their language to the Call Center staff. Producers with questions or who need assistance may also make an appointment with their local FSA office to review their application before submitting it. While farmers are not required to book an appointment with FSA prior to submitting their application, they are encouraged to do so if they have any questions or are a new customer. In addition, any farmer submitting their application electronically should call their FSA office prior to sending in their application. Ask for a receipt for service so that you have confirmation of your call.
STEP 1: Review the eligibility and documentation criteria to determine if you can and should apply. Use the USDA payment calculator tool to estimate your payment.
STEP 2: If you have questions or would like to talk your application over before submitting it, either: call the producer hotline (877-508-8364) with questions or call your local FSA office for an appointment (even if you are not 100% sure you will apply). Appointment delays are expected. An FSA office locator is available at https://www.farmers.gov/service-center-locator
STEP 3: Download all forms and begin compiling necessary records. Note that, although the CCC-860 is not a required form, your filling it out helps us understand data about how many farmers of color, beginning farmers, and veteran farmers are applying. We encourage anyone who is applying to fill out this optional form.
STEP 4:USDA has several other options for producers to complete and submit their CFAP applications. These include:
Online: Through the portal, producers with secure USDA login credentials—known as eAuthentication—can certify eligible commodities online, digitally sign applications and submit directly to the local USDA Service Center. Producers who do not have an eAuthentication account can learn more and begin the enrollment process at farmers.gov/sign-in. Currently, the digital application is only available to sole proprietors or single-member business entities.
Downloading the AD-3114 application form from farmers.gov/cfap and manually completing the form to submit to the local USDA Service Center by mail, electronically or by hand delivery to an office drop box. In some limited cases, the office may be open for in-person business by appointment. Visit farmers.gov/coronavirus/service-center-status to check the status of your local office.
Completing the application form using our CFAP Application Generator and Payment Calculator found at farmers.gov/cfap. This Excel workbook allows customers to input information specific to their operation to determine estimated payments and populate the application form, which can be printed, and then signed and submitted to their local USDA Service Center.
What we’re working on: Our press release on the direct payments program is here. We continue to advocate that USDA create regulations for the direct payments program that will work for small-scale, diversified farmers. We will continue to seek clarity and push the agency to ensure that future programs serve small-scale, beginning, and socially disadvantaged producers whose markets have been impacted by COVID-19.
Check out the USDA’s website for info on how to apply and links to the necessary forms.
The latest from DC (8-20-20): Secretary Perdue recently released a statement announcing funds for a third round of a food procurement program called the Farmers to Families Food Box. On August 7th, an amendment to the procurement program was introduced to clarify that multiple types of boxes are eligible, including combination boxes of produce, meat, eggs, and dairy; fresh fruits and vegetable box; meat box; and dairy box (including fluid milk). Of the fruit and vegetable components of the boxes, there is a requirement to include “1 or 2 locally grown fruit or vegetable items, as available, and if none available, add additional items of vendors choice or offeror may increase the fruit or vegetables to meet a minimum.” No local requirement is listed for meat, eggs, or dairy components.
While those submitting proposals must describe how they intend to engage small farmers (e.g those farms servicing local and regional interests and farmers markets), there is no requirement to collect or report data on farmers served. The solicitation makes clear that “while support of American Agriculture remains an important element, distributing boxes to food insecure populations becomes of paramount importance.” A new addition to this solicitation requires that applicants address the “last mile” delivery of product into the hands of the food insecure population in order to avoid placing additional costs of delivery on the nonprofit/food bank recipient.
The program is open to any entity with the capacity to aggregate, package, and distribute agricultural products from the listed categories. Recipient organizations could be “food banks, food pantries, churches, schools, community groups, and other nonprofit and governmental organizations for distribution to Americans who need food.”
However, the organization must already have a Data Universal Numbering System (DUNS) number, which is the code needed to complete any government grant or application, and will be required to register on The System for Awards Management (SAM.gov). For certain types of businesses additional certification may be required, andfarms selling to the organizations that are aggregating the food need to pass a Good Agricultural Practices (GAP) audit.
On August 17th, USDA announced an amendment that adds other certifications that can be used instead of Good Agricultural Practices. Those included:
1) USDA Good Agricultural Practices/Good Handling Practices audit conducted by a USDA AMS auditor.
2) Global Food Safety Initiative (GFSI) benchmarked certification program audits (GlobalGAP, SQF, Primus GFS, CanadaGAP).
USDA-AMS reserves the right to conduct onsite or remote validation audits of any vendor.
3) State level GAP certification programs (Massachusetts Commonwealth Quality Program, Vermont Community Accreditation for Produce Safety- Plus)
Food hubs should check out resources from the Wallace Center. A recording of their most recent call is here and the notes are here. Look for potential partners on their spreadsheet here.
USDA hosted a webinar on July 28th that can be viewed here (slides only can be accessed here) for more information. Questions regarding the Farm to Families RFP can be emailed to FFFBquestions@usda.gov.
NSAC’s first blog post about this program can be found here.
The latest from DC (5-4-20): The Small Business Administration (SBA)’s Economic Injury Disaster Loan (EIDL) program offers forgivable loan advances of up to $10,000 to businesses that are losing revenue amid the coronavirus pandemic. While farms were not eligible for the first round of EIDL funds, agricultural advocacy orgs like ours fought to make sure that you were included in the next round of funding. Farmers (with fewer than 500 employees) are eligible for Economic Injury Disaster Loans(EIDL) and applications through SBA are currently open only for agricultural businesses. Applications are here.
SBA has resumed processing EIDL applications that were submitted before the portal stopped accepting new applications on April 15 and will be processing these applications on a first-come, first-served basis. SBA will begin accepting new Economic Injury Disaster Loan (EIDL) and EIDL Advance applications on a limited basis only to provide relief to U.S. agricultural businesses.
Farms can apply online, directly through SBA. Applications are here. If you previously applied under the streamlined application (March 30 to program closure), there is no need to re-apply.
Loans can be made for up to $2 million, with an advance of $1,000 per employee up to $10,000 that does not need to be repaid. Note: If you receive an EIDL grant of up to $10,000, your Paycheck Protection Program loan forgiveness amount will be reduced by that amount.
The SBA is providing $1,000 per employee, up to ten employees (and if you’re a sole proprietor, you’re eligible for $1,000 only)” for the EIDL grant.
Agricultural businesses includes those businesses engaged in the production of food and fiber, ranching, and raising of livestock, aquaculture, and all other farming and agricultural related industries (as defined by section 18(b) of the Small Business Act (15 U.S.C. 647(b)).
Farm Commons, a wonderful ag law focused non-profit hosted a webinar for farmers on the EIDLs.
The latest from DC (7-30-20): PPP provides forgivable loans to small businesses (including farmers) to keep their workers on the payroll. Of the additional $321 billion included in the new agreement for PPP, $60 billion is dedicated for small businesses lacking access to large financial institutions. The bill includes specific funding set-aside for Community Development Financial Institutions (CDFIs), minority depository institutions, and smaller lenders.
A bill that extends the time for spending down the funds to 24 weeks (from 8), and lowers the amount that must be spent on payroll to 60% (from 70%) is expected to soon be signed into law. However, as the bill is written, spending any less than 60% on payroll will prevent eligibility for loan forgiveness. The bill also extends the minimum loan term to 5 years (from 2 years). Reports suggest that $100 billion in PPP funding is still available.
For-profit and non-profit farms are eligible for these funds.
No Personal Guarantee: no personal guarantee or collateral required
Loan Terms: 1% fixed interest rate, due in 5 years, payments automatically deferred for 6 months.
Loan Amount: Loans can be for up to 2.5 months of your average monthly payroll costs from the last year. Payroll costs include:
Salary, wages, commissions, or tips (capped at $100,000 on an annualized basis for each employee), including salaries for self-employed workers or gig workers;
Employee benefits including costs for vacation, parental, family, medical, or sick leave; allowance for separation or dismissal; payments required for the provisions of group health care benefits including insurance premiums; and payment of any retirement benefit;
Loan Use: loan funds can be used to make payroll and associated costs, including health and retirement benefits, payroll processing fees, facilities costs, and debt service.
Loan Forgiveness: Loans will be forgiven as long as loan proceeds are used to cover payroll costs, and most mortgage interest, rent, and utility costs over the 24-week period after the loan is made; and employee and compensation levels are maintained. The 24 weeks starts on the day you receive the loan funds.
At least 60% of the loan must be spent on payroll costs in the 24 weeks after loan disbursement in order to qualify for forgiveness.
You will owe money if you do not maintain your staff and payroll.
If you receive an EIDL grant, your PPP loan forgiveness amount will be reduced by that amount.
Number of Staff: Your loan forgiveness will be reduced if you decrease your full-time employee headcount.
Level of Payroll: Your loan forgiveness will also be reduced if you decrease salaries and wages by more than 25% for any employee that made less than $100,000 annualized in 2019.
Re-Hiring: You have until June 30, 2020 to restore your full-time employment and salary levels for any changes made between February 15, 2020 and April 26, 2020.
Requesting Loan Forgiveness: Submit a loan forgiveness application to the lender that is servicing the loan within 15 days after the 24-week period ends. SBA has posted information about applying for loan forgiveness here. The lender must make a decision on the forgiveness within 60 days.
The latest from DC (4-28-20):Secretary Perdue released a statement last week announcing the new Coronavirus Food Assistance Program (CFAP). This program has two parts:
Direct support to farmers and ranchers: $16 billion “in direct support based on actual losses for agricultural producers where prices and market supply chains have been impacted and will assist producers with additional adjustment and marketing costs resulting from lost demand and short-term oversupply.”
Purchase and distribution: USDA to partner with “regional and local distributors” to procure fruits and vegetables, dairy, and meat to serve food banks and other non-profit organizations.
What we’re working on: Along with many partners, we sent a letter to Secretary Perdue asking that at least $1 billion be spent on local/regional foods. Likewise, we sent a letter to USDA to urge that farms growing for local/regional markets not be required to fill out burdensome paperwork to prove their losses. A bipartisan group of Senators sent a similar letter. We will continue to push the agency to ensure that CFAP serves small-scale, beginning, and socially disadvantaged producers.
What we need from farmers: The program as currently designed may leave out thousands of farmers, including producers who sell into local and regional markets and producers historically underserved by USDA, including farmers of color.
Farmers’ Legal Action Group (FLAG) has created a detailed, yet brief guide, which provides legal analysis for farmers on a number of topics (many of which are part of the CARES Act), including SBA loans, unemployment insurance, funding for specialty crop and other producers, and changes to bankruptcy code.
The latest from DC (5-20-20): Senator Bob Casey (PA) and Representative Jahana Hayes (CT) have introduced the Food Assistance for Kids and Families During COVID-19 Act of 2020 (H.R 6445 /S. 3563) to authorize public-private partnerships between the USDA, authorized retailers and community based organizations to support food delivery to SNAP users and provide funding to support grocery delivery for program participants who are seniors, immunocompromised individuals and others unable to travel safely to a retail food outlet such as a grocery store or farmers market.. (Thanks to NSAC for the summary.) Additionally, several states have newly been added to the USDA’s online SNAP pilot program, and an expansion to “independently owned and operated retail stores beyond those included in the original pilot” was announced by USDA on May 20.
More Info: SNAP cannot currently be processed online, except by a few larger retailers in states with pilot programs. (In addition to this list, DC, NC, ID, CA, AZ, WV, KY, MO, TX, VT, WY, GA, CT, IL, IN, MD, MA, MI, NJ, OH, OK, PA, TN, and VA have been added to the pilot since the beginning of the outbreak.) These pilots, namely with Amazon and Walmart or larger grocery stores, began accepting SNAP benefits online, but we haven’t seen these roll out to smaller platforms. As of now, except for these pilots, the person doing the processing is supposed to be at the terminal with the EBT cardholder and the cardholder puts in their PIN.
Some retailers are answering this need in the following ways that markets or farmers could use if they’ve been approved to accept SNAP benefits: (from USDA response to an email inquiry)
The SNAP client places their order online or over the phone and picks it up at the store. If the store has a wireless Point of Sale system (POS) the customer would be able to complete the transaction without having to leave their car.
The SNAP client places their order online or over the phone and the order is delivered to their designated delivery address. The transaction can be completed using a wireless POS. (Note that the delivery fee would not be allowed to be included in the SNAP payment.)
SNAP client places their order online or over the phone and designates a person to pick the order at the store using the clients EBT card. The transaction can be completed, using the SNAP clients EBT card, in the store or by using a mobile POS device outside of the store.
As a last resort, if you do not have a mobile POS, under these extreme circumstances you could complete a manual voucher which the SNAP customer would need to sign in person at the point the voucher is authorized.
For a farmers market with a POS system (the farmers market could be closed or open) with farmers distributing boxed shares, the farmers market could collect the SNAP payments and distribute those funds to the farmers.
Revolving loan funds can facilitate farmer payment upfront but allow for weekly/biweekly payments from customers
Some things home delivery and no contact pick-up have been doing:
Scheduling a drop-off during a time when someone is home and handling EBT transactions then, while adhering to social distancing like placing the machine down, stepping away, customer picking up and swiping/entering, placing it back down and backing away.
Sanitizing the machines after each use, offering gloves to recipients, and reminding customers in general to wash their hands.
Having an authorized user of your card receive the delivery or shop for you.
The latest from DC (4-18-20): The Congressional response to COVID-19 has left out farmworkers and other essential workers in many key ways. We are working to support the efforts of farmworker organizations to move forward their priorities of hazard pay during the pandemic, better health and safety guidelines for farmworkers, and access to medical care and financial support in future bills.
What we’re working on: We joined allied groups in sending a letter to OSHA demanding health and safety guidelines that put the wellbeing of essential workers in the food system at the forefront. We have also signed on as a supporter of the COVID Immigrant Families Relief Act. We signed on to a group effort to include all workers, regardless of immigration status, in the Medicaid expansion and the $1200 benefit prior to the passage of the CARES Act. Check out our blog post on farm workers and COVID here.
More Info: If you are a farm worker and have been laid off or your hours have been cut, unemployment insurance may be an option. Now self-employed people and gig workers can apply for unemployment benefits, too. Apply through your state’s website. Note that since unemployment enrollment is at an all-time high, call wait times are very high and website stability has been iffy. There are some other tips for applying for unemployment here.
For farm workers who do not have a social security number or alien resident card, options are far more limited, sadly.
If you have been laid off or your hours have been cut, unemployment insurance may be an option. Now self-employed people and gig workers can apply. Apply through your state’s website. Note that since unemployment enrollment is at an all-time high, call wait times are very high and website stability has been iffy. There are some other tips for applying for unemployment here.
More Info (updated 5-1-20): While FSA’s emergency loans are just for natural disasters, a more traditional operating loan (or even a microloan) might be helpful. The interest rate is lower for the operating loans (1.75%) than the emergency loans (2.75%) right now, anyway. Microloans can be borrowed for up to $50K and the paperwork should be quicker and a little easier than for a larger loan. We’re hearing that FSA loan offices are slow because they’re limiting the number of people in each office. Please let us know if you are having issues in accessing credit through FSA or if you are finding barriers in servicing current FSA loans.
Latest from D.C. (updated 5-22-20): FSA has announced several temporary flexibilities for existing loans, including suspending loan accelerations and foreclosures. FSA also recently announced that they would be opening the Disaster Set-Aside Program to also include the COVID-19 pandemic. That means that you will be able to move your next direct loan payment to the end term of your loan. You should receive a letter with more information in the mail, and you can reach out to your local FSA office for additional help.
NOTE: This section applies to residential evictions and foreclosures only. For more information on evictions and foreclosures on farmland (including if your farmland and home are combined), see “How do I keep from losing my farmland or business location?“
Background: States are passing eviction and foreclosure moratoriums, and the CARES Act passed on March 27, 2020 also included some protections. While we are still working to get clarity on how these measures will apply to farmland mortgages and rentals, we have outlined what we know about residential eviction and mortgage protections below along with some resources that may help. It is important to note that things are changing rapidly and many of the measures below will be temporary. Thank you to the folks at the Farmers’ Legal Action Group for developing this comprehensive guide, which we have used to provide much of the text below.
CARES Act: The CARES Act includes two protections for borrowers with residential loans: (1) a moratorium on foreclosures; and (2) the right for a borrower to request forbearance on loans.
What are the requirements? To receive foreclosure and forbearance protections under the CARES Act, the mortgage loan must be federally backed. In general, to be a federally backed mortgage, the loan must either be made, insured, or guaranteed by the government, or the loan must be made and then purchased or securitized by Fannie Mae or Freddy Mac. In addition to being federally backed, in order to qualify for relief under the CARES Act, a loan must be secured by a lien on residential real property.
How do I find out if my loan is covered? Half of the home mortgages in the country are federally backed by Fannie Mae and Freddie Mac, so chances are good that your home mortgage might be protected. According to the federal Consumer Financial Protection Bureau, the bank/servicer has an obligation to help you to find out who holds or backs your mortgage. No matter who your lender is, reach out to see what options are available for you. Many lenders are also offering forbearance temporarily while many people in situations like yours sort out tricky financial situations, even if those loans aren’t backed by Freddie Mac or Fannie Mae.
How does the moratorium work? The foreclosure moratorium stipulates that for eligible borrowers, the lender may not start a foreclosure process for the loan, ask a court for a foreclosure judgment or for an order to sell the property, or execute a foreclosure-related eviction or foreclosure sale. The moratorium applies for not less than sixty days beginning on March 18, 2020.
What is forbearance and how do I request it? Forbearance means you do not need to make payments on your loan. It can last up to 180 days and be extended for an additional 180 days if you request an extension. Interest will continue to accumulate, but you will not be charged fees or penalties. Send a request for forbearance to your loan servicer and tell them that you are experiencing financial hardship, either directly or indirectly caused by the COVID-19 emergency.
What is forbearance vs. deferment? You might have heard these two words tossed about a lot since the start of the COVID-19 outbreak. While the federally backed mortgages are required to offer forbearance, other loans might offer deferment. The terms of the forbearance or deferment are important because sometimes interest is paused or sometimes it might still accrue. Sometimes payments could be tacked onto the end of your loan term or due in a lump sum when the deferment period is over. How your exact forbearance or deferment will work is very important to understand because you may not want to agree to a deferment that will require you to pay all of the deferred months’ payments in a lump at the end of a deferment time. Talk with your bank to fully understand the details.
Rural Development Loans: Direct and Guaranteed loans through Rural Development’s Rural Housing Service are also eligible for foreclosure protections. Borrowers under this program may also request a Payment Assistance Package.
State eviction and foreclosure protections: Protections vary greatly by state, and in some cases states have left the decision of whether to extend foreclosure and eviction protections up to cities and counties. The following resources may help you better understand what is happening where you live.
This spreadsheet, compiled by individuals associated with Columbia Law School and universities, provides state-by-state information on eviction rulings and executive orders, and is being updated regularly.
An example of a state-specific resource that may be helpful is this website for Virginia; other states may be developing similar resources.
Your landlord’s mortgage may be covered by Fannie Mae or Freddie Mac (see above) and they may be able to pass that protection onto you. Reach out to your landlord if you’re having a hard time paying your rent and try to work with them to come to an understanding.
Other protections: Credit card companies, small business lenders, and auto lenders may also be flexible at this time, so if you are finding yourself unable to pay debts, contact your lender.
NOTE: This section applies to evictions and foreclosures on farmland, including cases where your home and land are combined. For more information about residential eviction and foreclosure protections, see“How do I keep from losing my home?”
Background: States are passing eviction and foreclosure moratoriums, and the CARES Act passed on March 27, 2020 also included some protections. While we are still working to get clarity on how these measures will apply to farmland mortgages and rentals, we have outlined what we know below, along with some resources that may help. It is important to note that things are changing rapidly and many of the measures below will be temporary. Thank you to the folks at the Farmers’ Legal Action Group for developing this comprehensive guide, which we reference heavily below, and to Sarah Vaile and Rachel Armstrong at Farm Commoons, who provided additional analysis. For more background about the impact that the COVID-19 crisis is having on farmland along with our recommendations for individuals, organizations, and policy-makers, see our blog series, “Keeping Farmers on the Land in COVID-19.”
Note: Farmland is typically considered commercial property, which is the key distinction excluding it from many residential eviction and foreclosure protections that are being passed.
CARES Act: According to the FLAG guide, “The CARES Act mandates a foreclosure moratorium and loan forbearances for some federally backed residential mortgages. As the rules for these programs are currently being interpreted, it is unlikely that they will apply to most farm mortgages, even if those mortgages include a farm homestead.” However, they point out that, “If a farm has a mortgage that only covers a residence—and not a large part of the farmland—that mortgage could be eligible for the CARES Act mortgage forbearance and foreclosure moratorium.” You can read more detail of their analysis beginning on page 22 of the guide.
FSA Loans: The guide from FLAG also summarizes steps FSA has taken to stall foreclosures, including “the suspension of some direct loan accelerations and foreclosures,” and considering “allowing temporary deferrals of loan payments for guaranteed loans.” The guide also points out that “In general, USDA will follow state law for foreclosures”—this is an important note, because it means FSA foreclosures may still be allowed in your state. As the folks at Farm Commons explained to us, each state has its own rules on foreclosure—some require them to go through the courts (judicial), while others allow foreclosure to happen outside the courts (non-judicial). Since FSA has only temporarily suspended non-judicial foreclosures, it means that judicial foreclosures could still occur in states that are allowing them. The footnote on page 32 of FLAG’s guide goes into more detail about different types of foreclosure and how FSA operates. For more information about FSA provisions, see this section of our FAQ or visit USDA’s landing page, which includes updates on FSA loan programs.
Farm Credit Loans: According to this resource, developed by the Food and Beverage Law Clinic at the Pace University Law School, “The Farm Credit Administration is encouraging lenders in the Farm Credit System to work with borrowers affected by COVID-19 to extend the terms of loan repayments, restructure debt obligations, and ease some loan documentation or credit extension terms for new loans. Farmers who are having difficulty paying debts owed under the Farm Credit System can contact their local Farm Credit lenders. If the lender is not providing necessary flexibility, farmers may also consider contacting the Farm Credit Administration directly at 703-883-4056 (Voice & TTY) or email@example.com.”
State Protections: State eviction and foreclosure protections vary widely, and whether farmland rentals are covered under them depends on how they are worded and interpreted. Since farmland is typically considered commercial property, farmland renters will likely only be protected from eviction if commercial property—or agricultural real property—is specifically included in the state’s eviction ban. Some states have enacted eviction bans through legislation, while others like Vermont have so far just issued a temporary executive order.
The National Consumer Law Center is providing state-by-state summaries of eviction and foreclosure measures. An example of a state-specific resource that may be helpful is this website for Virginia; other states may be developing similar resources.
This spreadsheet, compiled by individuals associated with Columbia Law School and universities, provides state-by-state information on eviction rulings and executive orders, and is being updated regularly.
In the states that have enacted eviction bans, a few general categories seem to be emerging from analysis done by Farm Commons of the spreadsheet above:
(1) Including both residential and commercial property in bans (e.g. Oregon and New York);
(2) Only including residential property (e.g. Kansas, Illinois, and Texas);
(3) No apparent distinction between commercial and residential (e.g. Kentucky and Tennessee), leaving it to be determined whether farmland would be covered; and
(4) Leaving it up to cities and counties whether they will ban evictions (e.g. California, where it appears that of the few that have enacted bans, they seem to be just residential).
According to FLAG, at least one state—Iowa—has included “agricultural real property” in its temporary suspension of foreclosure proceedings.
More info: From what we are hearing, most land-related transactions—including loans, leases, purchases, and conservation easements—that were initiated before the COVID-19 crisis are proceeding. However, you may experience delays or barriers to accessing financing for new land purchase projects as lenders are moving operations online, and title and deed searches are being complicated by office closures. In addition, many land use decisions are made by planning and zoning boards, which typically meet in person. Canceled or postponed meetings may present delays in things such as building projects, and create barriers to land purchases that require subdivision or other approval.
State guidance: Some states have issued guidance affecting real property transactions. For example, New York’s executive order stipulates that lawyers may continue to work, as long as it is remote, and any in-person work must be limited to only what is absolutely necessary in support of essential businesses. The order also states that real estate services—including title searches, appraisals, permitting, inspections, along with recording, legal, and financial services—should be conducted remotely, although services may be conducted in-person to the extent legally necessary and in accordance with social distancing and disinfecting protocols. The order provides specific guidance that real estate brokerage offices must be closed to the public, including clients.
Soul Fire Farm’s Reparations Map provides a platform to facilitate reparations for Black, Latinx, Indigenous, Asian, and/or People of Color. See Soul Fire Farm’s website for more information about the map and how to include your project.
Many other organizations have helpful land access resources, a number of which are linked from our Finding Farmland Online Course mentioned above. For assistance connecting with a resource in your area, email our land team: firstname.lastname@example.org.
The COVID-19 pandemic is highlighting the essential role of farmers, farm workers, and all those who support our food system. The conversation about the value of food, and how we access it, is just now coming into focus for many Americans. As we scramble to feed our communities, protect growers, and stabilize supply chains, we must also talk about how access to land is an essential element of community stability, health, and well-being.
Our Land Access team is working on a three-part series on the impacts of the COVID-19 crisis on land access and security for farmers. The first post outlines potential impacts of the crisis on farmland; the second provides strategies to help keep farmers on the land; and the third suggests potential policy solutions.
The latest from DC (5-1-20): Unfortunately, there are not specific provisions or set-asides for farmers of color in the current programs. We are advocating for adaptations to the heirs property relending program in the next phase of COVID-19 funding.
More info: See above for information for farm workers.
This is an unquestionably difficult time for everyone, especially farmers and farm workers. Farm Aid (their hotline number is 1-800-FARM-AID) and other state-based orgs are working to be a mental health resource for farmers.