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119-s-3126119th CongressWALLET

Fair Credit for Farmers Act of 2025

Sponsored By: Senator Welch, Peter [D-VT]

Introduced

Summary

Short-term payment relief for distressed farm borrowers pairs a two-year, low-interest deferment with broad changes to loan rules and appeal processes. The bill lets eligible farmers pause direct loan payments and reshapes eligibility, collateral, refinancing, and the National Appeals Division.

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  • Farmers and households: Eligible farmers can defer payments on direct farm loans for two years at a 0.125% interest rate. The Secretary may extend loan maturities up to two years beyond statutory maximums for each loan type and the deferment does not apply to loans of 12 months or less.
  • Lenders and loan rules: New eligibility rules require at least one year of substantial farm management experience or a mentoring waiver for beginning farmers, broaden refinancing uses and limit certain prior direct-loan refinancing to four uses. The bill tightens collateral limits to avoid primary residences and require only adequate security and partial releases, and guarantors must waive guarantee fees for covered producers during the two-year deferment with a possible 180 day extension.
  • Appeals and equitable relief: National Appeals Division hearing officers can grant equitable relief and NAD must rely on information it already used unless a final decision letter says otherwise. For appellants with adjusted gross income at or below $300,000 the agency must prove by substantial evidence that an adverse decision was not erroneous.

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Bill Overview

Analyzed Economic Effects

4 provisions identified: 3 benefits, 0 costs, 1 mixed.

Two-year loan relief for farmers

If enacted, eligible farmers could delay principal and interest payments on qualifying USDA direct loans for two years. Interest on remaining principal would be 0.125% during that two-year period. Lenders must waive guarantee fees for covered producers for at least two years. The bill defines who is an eligible borrower and who is a covered producer.

Fair appeals and monetary relief

If enacted, National Appeals Division hearing officers could award equitable monetary relief in certain Farm Service Agency errors. For feasibility errors, relief could equal projected income minus projected expenses from the original application. Agencies would have to use the same information NAD used and not ask for duplicates. If your prior-year or five-year average AGI is $300,000 or less, the agency must meet a higher proof standard.

Stronger home and collateral protections

If enacted, delinquent borrowers who seek restructuring would give liens only up to 100 percent of the loan value. A borrower's principal residence could be used only as a last resort and would include the home plus up to 10 adjoining acres. If other assets fully secure the loan, the agency must start a partial release of the home's lien without action by the borrower. The agency may not take security worth more than the loan amount.

More refinancing and eligibility protections

If enacted, borrowers could refinance more private or guaranteed debt using USDA direct loans. A farm ownership loan could refinance debt from non-Secretary lenders, but direct-loan refinancing would be limited to four prior uses. Direct operating loans would also be allowed to refinance indebtedness. Agencies could not deny eligibility solely because of prior debt write-downs, and timing rules for beginning-farmer set-asides become subject to practicability.

Sponsors & CoSponsors

Sponsor

Welch, Peter [D-VT]

VT • D

Cosponsors

  • Sen. Gillibrand, Kirsten E. [D-NY]

    NY • D

    Sponsored 11/6/2025

  • Sen. Fetterman, John [D-PA]

    PA • D

    Sponsored 11/18/2025

Roll Call Votes

No roll call votes available for this bill.

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