INCREASES IN LOANS TO BEGINNING FARMERS
                                            Release No. 0112.97
                                                               
                                    Tom Amontree (202) 720-4623
                                     Janet Baker (202) 720-7962
                                       jbaker2@wdc.fsa.usda.gov

USDA ANNOUNCES INCREASES IN LOANS TO BEGINNING FARMERS 

     WASHINGTON, April 14, 1997--Agriculture Secretary Dan Glickman
announced that USDA has issued new regulations that increase its maximum
loan guarantee to beginning farmers on farm operating and ownership loans to
95 percent under certain circumstances.  Previously, USDA loan guarantees
were limited to a maximum of 90 percent. 

     This action is part of an ongoing effort by the Clinton Administration
to focus resources on beginning farmers.

     "America's prosperity and vitality depend a great deal on our nation's
continued leadership in agriculture," Glickman said.  "To maintain this
leadership into the 21st century, we need to make sure we have new farmers
moving into the field to replace those who will be retiring.  To make this
happen, we must find new ways to encourage and assist young farmers to
overcome barriers that prevent them from starting their own operations. 
This program is a step toward that goal."

     Lenders may now receive a 95 percent guarantee on loans used to
finance borrowers participating in the Downpayment Program.  This program
assists beginning farmers and ranchers to purchase a farm or ranch and
provides a means for retiring farmers to transfer their land to a new
generation.

     Under the Downpayment Program, USDA will finance 30 percent of the
land's purchase price over 10 years at a fixed rate of 4 percent.  The loan
applicant must make a cash downpayment of 10 percent of the purchase price
with the remaining 60 percent financing to come from a commercial lender or
private party.  USDA can now provide eligible lenders with a 95 percent
guarantee on the remaining 60 percent of the purchase price.  USDA will also
guarantee Operating Loans made by eligible lenders at 95 percent while the
direct Downpayment Loan is outstanding.  

     Lenders may also receive 95 percent guarantee on loans used to
refinance FSA direct loans.  By offering lenders a 95 percent guarantee for
this purpose, FSA encourages borrowers to obtain commercial loans through
its less expensive Guaranteed Program.  This also helps the borrower develop
a working relationship with a commercial lender.

     "I urge young farmers just starting out to look into this program,"
said Glickman.  "It may be just the thing many of them need to start their
own operations on the right track."

     Interested borrowers and lenders may contact their local Farm Service
Agency (FSA) office.

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