USDA Farm Loans in Farm Bill 2026 (H.R. 7567): New Limits, Eligibility, and Programs

Last updated: July 10, 2026

Updated July 10, 2026. Both the House-passed bill and the Senate’s June 23 discussion draft raise FSA farm loan limits to the same levels, making these numbers very likely to survive conference. See the full House vs Senate comparison.

TL;DR: H.R. 7567 (the 2026 Farm Bill, as passed by the House on April 30, 2026) would raise USDA Farm Service Agency (FSA) direct farm ownership loan limits from $600,000 to $850,000, direct operating loans from $400,000 to $750,000, and direct microloans from $50,000 to $100,000. Guaranteed loan limits would rise to $3 million for operating loans and $3.5 million for farm ownership loans, both adjusting for inflation after FY2026. The bill also reduces the farming experience requirement from three years to two, expands the Heirs Property Relending Program with $60 million annually for legal services, and creates a new expedited approval pilot for Preferred Certified Lenders. Bill status as of July 10, 2026: passed House April 30, 2026; Senate discussion draft released June 23, 2026. Source: CRS Report R48918, Title V (Credit), pp. 52-60.

Loan program	Current law	H.R. 7567 (House-passed)	Section
Direct farm ownership	$600,000	$850,000	§5105
Direct operating	$400,000	$750,000	§5202
Direct microloan	$50,000	$100,000	§5203
Guaranteed farm ownership	$2.3M (inflation-adjusted)	$3.5M	§5105
Guaranteed operating	$2.3M (inflation-adjusted)	$3.0M	§5202
Down payment loan limit	$300,150 (separate cap)	Folded into overall ownership cap	§5108

What the Farm Bill 2026 changes for USDA farm loans

H.R. 7567, the Farm, Food, and National Security Act of 2026, was passed by the U.S. House of Representatives on April 30, 2026. Title V of the bill addresses agricultural credit programs administered through the USDA Farm Service Agency (FSA), the Farm Credit System (FCS), and Farmer Mac. The bill is now pending before the Senate Committee on Agriculture, Nutrition, and Forestry. For the broader context, see the Title V (Credit) overview and What’s New vs. 2018.

Title V reauthorizes most existing farm loan programs through FY2031 and makes substantive changes to loan limits, borrower eligibility, application processes, and lender oversight. The changes follow inflation in farmland prices and input costs since the last increases, which were enacted in the 2018 Farm Bill (P.L. 115-334).

The key changes break into five categories:

1. Increased loan limits across direct, guaranteed, and microloan programs (Subtitles A and B).
2. Eligibility changes that lower the experience requirement and expand entity ownership flexibility (§5101, §5102, §5201, §5301).
3. A new expedited approval pilot program for Preferred Certified Lenders (§5111).
4. Heirs Property Relending Program expansion with $60 million annually for legal services cooperative agreements (§5109).
5. Substantial changes to Farm Credit System and Farmer Mac authority (§5107, §5502, §5503, §5506).

Direct loan limit increases

Direct farm ownership loans (§5105)

The maximum individual direct farm ownership loan would increase from $600,000 to $850,000. Source: H.R. 7567 §5105, amending 7 U.S.C. §1925(a)(2).

Direct farm operating loans (§5202)

The maximum individual direct farm operating loan would increase from $400,000 to $750,000. Source: H.R. 7567 §5202, amending 7 U.S.C. §1943(a)(1).

Direct microloans (§5203)

The maximum microloan would double from $50,000 to $100,000. Microloans use streamlined application and approval processes, making them the most accessible FSA loan product for beginning farmers, veteran farmers, and small operations. Beginning farmers also have access to the dedicated Beginning Farmers Loan Pilot. Source: H.R. 7567 §5203, amending 7 U.S.C. §1943(c)(2).

Down payment loans (§5108)

H.R. 7567 would eliminate the separate $300,150 cap on down payment loans. Down payment loans would instead be subject to the overall farm ownership loan limit set in 7 U.S.C. §1925. Borrowers would still need to provide a 5% down payment, and the loan would still cover up to 45% of the purchase price or appraised value. The practical effect: down payment loans could be substantially larger than the current $300,150 ceiling, up to 45% of the purchase price within the new $850,000 ownership loan limit.

Guaranteed loan limit increases

Under current law, the guaranteed loan program operates with a combined limit of $2.3 million in FY2026 (inflation-adjusted from $1.75 million in 2019), shared across farm ownership and operating loans. The amount used in one type reduces the amount available in the other.

H.R. 7567 would split this into two separate limits:

• Guaranteed farm ownership loans: $3.5 million (§5105)
• Guaranteed farm operating loans: $3.0 million (§5202)

Both limits would adjust for inflation after FY2026, using a new inflation index (see below). The CRS report flags that having separate limits on the two guaranteed loan types may complicate implementation, because the limits are still reduced by outstanding borrowing in the other type. Source: CRS Report R48918, p. 55.

Inflation index change (§5106)

H.R. 7567 would change the inflation adjustment formula. Current law adjusts limits using the USDA Prices Paid by Farmers Index. The bill would change this to an index based on values per acre of farm real estate, cropland, and pastureland, equally weighted, as measured by USDA. This better tracks farmland appreciation, which has substantially outpaced general farm input inflation over the past decade.

Eligibility changes

Experience requirement reduced from 3 years to 2 years (§5102)

H.R. 7567 reduces the farming experience requirement to qualify for the farm loan program from three years to two years. The bill also expands the list of alternatives that can substitute for direct farming experience to include “operational” responsibilities for hired farm labor and “other criteria established by the Secretary.” This change is intended to make farm loans more accessible to beginning farmers transitioning from farm-management or farmworker roles. Source: H.R. 7567 §5102, amending 7 U.S.C. §1922(b).

”Qualified operators” as eligible entities (§5101, §5201, §5301)

Across farm ownership loans (§5101), operating loans (§5201), and emergency loans (§5301), the bill makes three eligibility changes:

1. Replaces “majority” ownership with “at least 50 percent” ownership for entity and individual ownership interests.
2. Gives USDA authority to define “qualified operators” as entities that could be eligible for loans, in recognition of evolving family farm business structures (LLCs, family trusts, multi-generational partnerships).
3. Loosens the embedded entity rule. Current law requires that 75% of each embedded entity be owned by individuals who own the farm. H.R. 7567 allows more flexibility, requiring instead that 75% of the total interest in the entities be owned by qualified operators.

The practical effect: family farms operating through stacked LLCs and partnerships, common in multi-generational operations, will have fewer structural barriers to qualifying.

New programs and pilot programs

Expedited approval pilot for Preferred Certified Lenders (§5111)

H.R. 7567 directs USDA to create a pilot program for preapproval of direct and guaranteed farm ownership loans by Preferred Certified Lenders. USDA must report results to the agriculture committees of jurisdiction within one year of enactment. Pilot authority sunsets in FY2031.

This is a structural change in how FSA loans get approved. Under the pilot, qualified third-party lenders could effectively front-line the approval process for ownership loans, reducing USDA processing time. The trade-off, which the CRS report does not address directly, is that delegating preapproval to third-party lenders shifts initial credit decisions outside USDA review.

Refinancing of guaranteed loans into direct loans (§5103)

H.R. 7567 adds a new authority for USDA to refinance distressed guaranteed loans into direct loans. USDA must issue regulations within one year of enactment. Eligible loans must be:

• Determined by USDA to be in distress
• In monetary default such that the lender has initiated liquidation or foreclosure
• Have a reasonable chance of success after refinancing

This is intended to give USDA a tool to keep struggling farmers in business before guaranteed lenders force foreclosure.

Conservation Loan Program adds precision agriculture (§5104)

The Conservation Loan Program priority list would add precision agriculture practices and technologies. Existing priorities for beginning farmers and ranchers, conversion to organic or sustainable production, and practices for highly erodible land are retained. Appropriations are reauthorized at current levels ($150 million annually) through FY2031.

Risk management feasibility report (§5509)

USDA must report within one year on the feasibility of requiring adoption of risk management practices as a condition for approving direct and guaranteed farm operating loans. The stated goal is to improve borrower creditworthiness. This is a study mandate, not yet a binding requirement.

Heirs Property Relending Program changes (§5109)

The Heirs Property Relending Program helps families resolve title disputes on agricultural land inherited without a clear chain of title (a problem especially prevalent in Black-owned farmland in the South). Current law authorizes $10 million annually for the relending program.

H.R. 7567 makes two changes:

1. Reauthorizes the existing relending program at current levels through FY2031 (§5109(a)).
2. Creates a new cooperative agreement program for nonprofit organizations to provide legal services to heirs, with $60 million authorized annually through FY2031 (§5109(b)).

The legal services program is significant because title resolution is the binding constraint for most heirs, not access to capital. Funding the legal pathway, separate from the lending program, addresses a long-standing gap. Conditions are set on legal contract duration and success metrics. USDA must report annually to the agriculture committees of jurisdiction on both the legal services program and the overall Heirs Property Relending Program.

Farm Credit System (FCS) changes

The Farm Credit System is a private cooperative lender network, structured as a government-sponsored enterprise, that serves a different segment than FSA. FCS lends to creditworthy farmers and ranchers (those who CAN obtain credit elsewhere), while FSA serves family-sized farms that cannot. H.R. 7567 makes three substantive changes to FCS authority:

FCS lending for essential rural community facilities (§5107)

FCS is currently not authorized to lend directly for rural community facilities. H.R. 7567 would expand FCS authority to lend for “essential rural community facilities” as defined by USDA Rural Development. Conditions:

• Total such loans may not exceed 15% of an FCS institution’s loans
• FCS must offer loan participation opportunities to at least one non-USDA lender, with priority for local rural community banks
• Loan participation offers must be reported to the Farm Credit Administration
• Annual reports to the agriculture committees of jurisdiction are required

This is the most consequential FCS change in the bill. Community bankers have historically opposed expanded FCS lending authority on competitive grounds. The required loan participation offer to community banks is the negotiated compromise.

CoBank export financing expansion (§5502)

CoBank, the FCS lender for cooperatives, currently has its export financing limited to 50% of capital (about $7.5 billion under current law given CoBank’s $15.1 billion of capital at year-end 2025). H.R. 7567 would change the limit to 15% of total assets. With CoBank’s $223 billion in assets at year-end 2025, this would allow approximately $33 billion in export loans, a roughly 4x expansion. Source: CoBank 2025 Annual Report, pp. 87, 158, cited in CRS Report R48918, p. 53.

Rural definition expansion for water and waste loans (§5503)

CoBank can make direct and guaranteed loans to cooperatives and public agencies for water and waste disposal facilities in “rural” areas. Current law defines rural as areas not within a town greater than 20,000 people. H.R. 7567 would raise this threshold to 50,000 people. Practical effect: small and mid-size cities would become eligible recipients of CoBank-financed water and waste infrastructure.

FCA as sole regulator of FCS (§5504)

H.R. 7567 adds a section to the Farm Credit Act of 1971 stating that:

• The Farm Credit Administration (FCA) is the sole regulator of FCS
• The section does not limit the authority of the Farm Credit System Insurance Corporation
• A law or rule enacted after the farm bill shall not be considered to supersede FCA’s sole authority unless it does so expressly

This is a jurisdictional clarification, likely intended to preempt future federal regulatory turf battles over FCS oversight.

Extended examination cycle for low-risk FCS institutions (§5510)

Current law requires FCA to examine FCS institutions at least once every 18 months. H.R. 7567 would give FCA discretion to extend the cycle by 6 months (to 24 months) for small, low-risk institutions.

Farmer Mac changes (§5505, §5506)

Farmer Mac is a privately owned secondary market for agricultural loans, structured as a separate government-sponsored enterprise from FCS.

Loan limit overhaul (§5506)

Current Farmer Mac individual loan limits, set in 1988 and inflation-adjusted, were $17.4 million in 2025. Loans secured by mortgages on farms under 2,000 acres were exempt from the limit. H.R. 7567 would replace the individual loan limit and the 2,000-acre exception with a single cumulative loan limit per borrower of 10% of Farmer Mac’s Tier 1 capital, which equates to approximately $171 million as of December 31, 2025. FCA may establish a smaller limit if necessary for safe and sound operations.

The practical effect: Farmer Mac can accept much larger individual loans, primarily benefiting large-farm and ag-business borrowers. The 10% Tier 1 capital cap will grow with Farmer Mac’s capital base.

REAP loan eligibility (§5505)

Farmer Mac’s charter would expand to include loans guaranteed under the Rural Energy for America Program (REAP, 7 U.S.C. §8107). This creates a secondary market for renewable energy and energy efficiency loans to rural businesses and agricultural producers.

Other administrative changes

Loan authorization levels extended (§5402)

H.R. 7567 extends FSA’s annual loan-making authorization of $10 billion through FY2031, including $3 billion for direct loans and $7 billion for guaranteed loans, with each category equally divided between farm ownership and farm operating loans.

Beginning farmer set-aside extended (§5403)

The bill extends through FY2031 the requirement that 50% of direct farm operating loan funds be reserved for beginning farmers for the first 11 months of each fiscal year.

Prompt approval threshold raised (§5110)

For loan guarantees, the threshold for short application forms increases from $125,000 to $1 million. USDA must notify Preferred Lenders of decisions within 5 days. The bill creates a tiered guarantee structure:

• 90% guarantee on loans up to $125,000
• 75% guarantee on loans up to $500,000
• 50% guarantee on loans up to $1,000,000

USDA must also develop an expedited application process for business and industry loan guarantees up to $400,000 (or $600,000 if default risk is not increased).

State Agricultural Mediation Programs (§5507)

• Maximum state grant increases from $500,000 to $700,000
• Federally-recognized Indian Tribes would become eligible recipients (treated as “states” for grant purposes)
• States can carry over up to 25% of unobligated amounts
• Reauthorized through FY2031

What’s still pending (as of June 25, 2026)

H.R. 7567 has passed the House but is not yet law. For the current state of play, see the Senate status tracker and the full bill summary. Key open questions:

1. Senate version. The Senate Committee on Agriculture, Nutrition, and Forestry released its own version, the Agricultural Act of 2026, as a discussion draft on June 23, 2026, with committee markup expected in July. The Senate text differs from the House bill on several provisions, particularly around SNAP changes in Title IV (which has dominated the Senate debate) and conservation funding in Title II.

2. Conference committee. If the Senate passes its own version, a conference committee will reconcile differences. The credit title is generally less contested than nutrition or commodity provisions, so substantial changes to Title V in conference are not expected, but loan limits and the Heirs Property Relending Program legal services authorization could be adjusted.

3. USDA rulemaking. Multiple provisions require USDA regulations within one year of enactment, including the guaranteed-to-direct loan refinancing authority (§5103) and the expedited approval pilot for Preferred Certified Lenders (§5111). None of these regulations would be in place at enactment.

4. Implementation complexity. The CRS report flags that separate limits on guaranteed farm ownership and operating loans (§5105 and §5202) may complicate implementation given that the limits are reduced by the amount of borrowing in the other type.

5. Effective date. Most provisions would take effect on enactment. Loan limit increases and eligibility changes would apply to loans made or guaranteed after the date of enactment.

Comparison table: current law vs. H.R. 7567 Title V

Provision	Current law	H.R. 7567	Section
Direct farm ownership loan limit	$600,000	$850,000	§5105
Direct farm operating loan limit	$400,000	$750,000	§5202
Direct microloan limit	$50,000	$100,000	§5203
Guaranteed farm ownership loan limit	$2.3M (inflation-adjusted, combined with operating)	$3.5M (separate, inflation-adjusted after FY2026)	§5105
Guaranteed farm operating loan limit	$2.3M (inflation-adjusted, combined with ownership)	$3.0M (separate, inflation-adjusted after FY2026)	§5202
Down payment loan cap	$300,150 separate	Folded into overall ownership loan limit	§5108
Farming experience requirement	3 years	2 years	§5102
Entity ownership threshold	”Majority"	"At least 50 percent”	§5101, §5201, §5301
Embedded entity ownership rule	75% of each embedded entity owned by individuals who own the farm	75% of total interest in entities owned by qualified operators	§5101, §5201
Inflation index	USDA Prices Paid by Farmers Index	Index of farmland values per acre (equally weighted: real estate, cropland, pastureland)	§5106
Short application form threshold	$125,000	$1,000,000	§5110
Preferred Lender decision window	Not specified	5 days	§5110
Heirs Property Relending Program	$10M annually	$10M annually + $60M annually for legal services cooperative agreements	§5109
Refinancing guaranteed to direct loans	Not authorized	Authorized for distressed loans, regulations due within 1 year	§5103
Expedited approval pilot	Not authorized	New pilot for Preferred Certified Lenders, sunsets FY2031	§5111
Annual loan-making authorization	$10B/year through FY2026	$10B/year through FY2031	§5402
Beginning farmer set-aside	50% of direct operating loan funds, 11 months/year, through FY2026	Same, extended through FY2031	§5403
FCS lending for rural community facilities	Not authorized	Up to 15% of institution’s loans, with bank participation offer required	§5107
CoBank export financing limit	50% of capital (~$7.5B)	15% of total assets (~$33B)	§5502
Rural definition (water/waste loans)	Towns <20,000 population	Towns <50,000 population	§5503
FCA as sole FCS regulator	Implicit	Explicit	§5504
FCA examination cycle for low-risk FCS institutions	18 months	Up to 24 months	§5510
Farmer Mac individual loan limit	$17.4M (inflation-adjusted), 2,000-acre exception	10% of Tier 1 capital (~$171M), no acreage exception	§5506
Farmer Mac REAP loan eligibility	Not eligible	Eligible	§5505
State Agricultural Mediation grant max	$500,000	$700,000	§5507
Federally-recognized Indian Tribes as eligible states	Not specified	Explicitly included	§5507
Maximum interest rate (low-income farm ownership)	Not less than 5%, not more than half of 5-year Treasury yield + 1%	Maximum 5%	§5508(m)

Frequently asked questions

What is the new direct farm ownership loan limit in the Farm Bill 2026?

H.R. 7567 raises the direct farm ownership loan limit from $600,000 to $850,000 (§5105). The increase reflects inflation in farmland prices since the last increase in the 2018 Farm Bill. The new limit applies to loans made after the bill is enacted. The bill has passed the House as of April 30, 2026, but is not yet law.

How much can I borrow as a direct operating loan under H.R. 7567?

The maximum direct farm operating loan would increase from $400,000 to $750,000 under H.R. 7567 (§5202). For microloans, which use streamlined application processes, the maximum would double from $50,000 to $100,000 (§5203). These limits apply to loans made after enactment. Beginning farmers retain priority access to 50% of direct operating loan funds for the first 11 months of each fiscal year (§5403).

What is the new microloan limit in the Farm Bill 2026?

H.R. 7567 raises the FSA microloan maximum from $50,000 to $100,000 (§5203). Microloans use streamlined application and approval processes, making them the most accessible FSA loan product for beginning farmers, veteran farmers, and small operations. The cooperative lending pilot program for community development financial institutions to make or guarantee microloans is also extended through FY2031 (§5204).

Does the Farm Bill 2026 reduce the farming experience requirement?

Yes. H.R. 7567 reduces the farming experience requirement for direct USDA farm loans from three years to two years (§5102). The bill also expands the list of qualifying alternatives to include operational responsibilities for hired farm labor and other criteria established by USDA. This change is intended to make farm loans more accessible to people transitioning into farm ownership from farm-management or farmworker roles.

What changes does H.R. 7567 make to the Heirs Property Relending Program?

The bill reauthorizes the existing $10 million per year Heirs Property Relending Program through FY2031 and adds a new cooperative agreement program for nonprofit organizations to provide legal services to heirs, authorized at $60 million annually through FY2031 (§5109). The legal services program addresses the binding constraint for most heirs, which is title resolution rather than access to capital. USDA must report annually to the agriculture committees on both programs.

When will the new farm loan limits take effect?

H.R. 7567 passed the House on April 30, 2026, but is not yet law. The bill is pending in the Senate Committee on Agriculture, Nutrition, and Forestry. If both chambers pass matching versions, the bill goes to the President for signature. Most provisions in Title V (Credit) would take effect on enactment, meaning new loan limits would apply to loans made or guaranteed after that date. Several provisions require USDA rulemaking within one year of enactment, including the guaranteed-to-direct loan refinancing authority (§5103) and the expedited approval pilot for Preferred Certified Lenders (§5111).

What is the difference between FSA direct loans and guaranteed loans?

FSA direct loans are made directly by USDA to farmers who cannot obtain credit elsewhere at reasonable terms. FSA guaranteed loans are made by private lenders (banks, Farm Credit System institutions) with a USDA guarantee against default. Direct loans have lower interest rates and looser credit standards but smaller maximum amounts. Guaranteed loans allow larger amounts at private-lender rates with USDA reducing the lender’s risk. H.R. 7567 raises both direct and guaranteed loan limits, with guaranteed loan limits adjusting for inflation after FY2026.

Sources and further reading

• CRS Report R48918, “The 2026 Farm Bill (H.R. 7567): Comparison with Current Law,” Congressional Research Service, June 11, 2026. Title V (Credit), pp. 52-60. Authored by Jim Monke, CRS Specialist in Agricultural Policy.
• H.R. 7567, the Farm, Food, and National Security Act of 2026, as passed by the U.S. House of Representatives on April 30, 2026. Title V (Credit), §§5101-5510.
• 7 U.S.C. §§1921 et seq. (Consolidated Farm and Rural Development Act, ConAct), the underlying statute governing FSA farm loan programs.
• 12 U.S.C. §§2001 et seq. (Farm Credit Act of 1971), the underlying statute governing the Farm Credit System and Farmer Mac.
• CRS Report R46768, “Agricultural Credit: Institutions and Issues,” by Jim Monke.
• CRS In Focus IF10767, “Farm Credit Administration and Its Board Members,” by Jim Monke.
• CRS In Focus IF11595, “Farmer Mac and Its Board Members,” by Jim Monke.
• USDA Farm Service Agency (FSA) Farm Loan Programs: https://www.fsa.usda.gov/programs-and-services/farm-loan-programs/