What the Farm Storage Facility Loan Program is and who can use it
The Farm Storage Facility Loan Program is a low-interest loan from the U.S. Department of Agriculture that helps farmers build or upgrade storage structures for crops. The USDA lends money directly to farmers to construct grain bins, cold storage for produce, hay barns, or other permanent storage buildings. You repay the loan over time at a fixed interest rate, which means your monthly payment stays the same for the life of the loan.
This program is open to farmers who grow may be able to access crops — primarily grains, oilseeds, hay, and certain specialty crops like fruits and vegetables. You must own or operate the farm where the storage will be built, and you need to show that the storage will reduce losses or improve the quality of your crop. The USDA does not require you to have perfect credit, but they do check your ability to repay.
The loan covers the cost of the building itself, equipment permanently attached to it (like grain dryers or cooling systems), and site preparation. It does not cover land purchase, equipment that can be moved, or storage for livestock feed or processed products.
Key Takeaways
- The Farm Storage Facility Loan Program provides loans of up to $500,000 per farmer to build or upgrade crop storage structures.
- You must be a farmer who grows may be able to access crops and can demonstrate that storage will reduce crop loss or improve quality.
- The USDA lends directly to you at a fixed interest rate, and you repay over a set term — typically 7 to 20 years depending on the structure type.
- You explore through your local USDA Farm Service Agency office, and the process usually takes 30 to 60 days from process to loan approval.
- The loan covers construction and permanently installed equipment, but not land, movable equipment, or storage for processed products.
Loan amounts, interest rates, and repayment terms
The maximum loan amount is $500,000 per farmer, though the actual amount you can borrow depends on the cost of your project and your ability to repay. The USDA sets the interest rate quarterly, and it is tied to the cost of funds to the government plus a small margin. Because rates change, the current rate is not fixed in advance — you will see the exact rate when you receive your loan offer.
Repayment terms vary by the type of storage you are building. A grain bin or similar structure typically has a 7-year loan term. A permanent building like a cold storage facility or hay barn may may have access to for a 10 or 20-year term, depending on the expected life of the structure. You make monthly payments that include both principal and interest, and the payment amount does not change over the life of the loan.
The USDA does not charge an upfront process fee or origination fee. However, you will pay for a title search and appraisal if the USDA requires them, and these costs are usually added to your loan amount rather than paid upfront.
What you need to bring to your local Farm Service Agency office
Start by contacting your county Farm Service Agency office — this is where all Farm Storage Facility Loan applications are submitted. You can find your local office on the USDA Farm Service Agency website by entering your county and state. When you visit or call, ask to speak with a loan officer about the Farm Storage Facility Loan Program.
Bring or be ready to provide: a detailed description of the storage structure you plan to build (including dimensions and materials), a cost estimate from a contractor or supplier, a site plan showing where the structure will be located on your farm, proof of ownership or a lease agreement for the land, and your farm's financial records for the past two years (tax returns or profit-and-loss statements). You will also need to show your personal identification and provide information about any existing debts.
The loan officer will ask you to explain how the storage will reduce crop loss or improve quality — for example, grain storage prevents weather damage and allows you to sell at better prices, or cold storage extends the shelf life of produce. Have specific numbers ready if you can: how much crop loss you currently experience, or what price premium you expect from better storage.
How the process and approval process works
After you submit your process and documents, the USDA orders an appraisal of your farm to confirm its value and your ability to repay. This usually takes two to three weeks. The loan officer reviews your financial records, checks your credit, and verifies that your farm and the proposed storage meet program requirements.
Once the appraisal is complete, the USDA makes a credit decision. If approved, you receive a loan offer letter that states the loan amount, interest rate, repayment term, and monthly payment. You have a set number of days to accept or decline the offer. If you accept, you sign the loan documents and the USDA disburses the funds.
The entire process from process to loan closing typically takes 30 to 60 days, though it can be longer if the appraisal is delayed or if you need to provide additional information. Once the loan closes, you can begin construction. The USDA may require inspections during construction to confirm the work matches your approved plans.
Common reasons applications are denied or delayed
Applications are most often denied because the applicant's debt-to-income ratio is too high — the USDA wants to see that your farm income is sufficient to cover the new loan payment plus your existing debts. If you have recent tax returns showing a loss, or if you owe significantly more than your farm is worth, the USDA may decline your process.
Applications are delayed when the appraisal takes longer than expected, when you do not provide complete financial records, or when the USDA needs clarification about your farm operation or the proposed storage. If you are asked for more information, respond quickly — delays in providing documents can push your approval back by weeks.
Some applications are denied because the proposed storage does not meet program requirements. For example, if you want to build storage for processed products (like canned goods or flour) rather than raw crops, the program does not cover it. Similarly, if the storage is primarily for livestock feed, it is not may be able to access. Review the may be able to access crops and storage types with your loan officer before you invest time in detailed plans.
What happens after your loan is approved and closed
Once the loan closes, the USDA disburses the funds to you or directly to your contractor, depending on what you arrange. You are responsible for hiring the contractor, overseeing the construction, and ensuring the work is completed as planned. The USDA may conduct inspections during and after construction to verify that the work matches your approved plans and that funds were used appropriately.
Your monthly loan payments begin on the date specified in your loan documents, typically 30 to 60 days after the loan closes. You make payments to the USDA Farm Service Agency, and you can set up automatic payments from your bank account to avoid missing a payment. If you have difficulty making a payment, contact your loan officer when ready — the USDA has options like deferment or restructuring if you face temporary hardship.
The storage structure becomes collateral for the loan, meaning the USDA has a lien on it. If you sell the farm or the storage structure before the loan is repaid, you must use the sale proceeds to pay off the remaining loan balance. You can pay off the loan early without penalty if you want to.
Alternatives if the Farm Storage Facility Loan Program does not fit your situation
If you need storage but do not may have access to for this program — for example, because your debt is too high or your crop is not may be able to access — the USDA offers other loan programs. The Farm Operating Loan can be used for a broader range of farm expenses, including some equipment purchases. The Microloan program offers smaller amounts (up to $50,000) with faster approval for farmers who do not may have access to for standard loans.
Outside the USDA, some farmers use conventional bank loans or equipment financing from agricultural lenders. These loans may have higher interest rates but sometimes have more flexible credit requirements. Your local Farm Service Agency loan officer can discuss which options might work for your situation.
If you are building storage primarily to reduce waste or improve sustainability, you may also be may be able to access for cost-share programs through your state's Department of Agriculture or through USDA conservation programs, which can cover part of the construction cost without requiring a loan.
Frequently Asked Questions
Can I use this loan to build storage for livestock feed?
No. The Farm Storage Facility Loan Program is for storage of crops you grow for sale, not for feed or other inputs. If you need storage for hay that you sell, that is may be able to access. If you need storage for hay you feed to your own livestock, it is not.
What if I do not own the land where I want to build the storage?
You can still borrow if you have a long-term lease — typically at least as long as your loan term. You will need to provide a copy of the lease, and the USDA will want the landowner's permission for the structure to be built. The storage itself becomes collateral, so the USDA needs assurance you will not lose access to it mid-loan.
How much does the appraisal cost, and who pays for it?
Appraisal costs vary by location and farm size, typically ranging from $300 to $800. You do not pay upfront — the cost is added to your loan amount and you repay it as part of your monthly payment. Ask your loan officer for an estimate before you explore.
Can I borrow money for equipment like a grain dryer or cooling system?
Yes, but only if the equipment is permanently installed and part of the storage structure. A grain dryer built into a bin or a cooling system that is part of a cold storage building is covered. Portable equipment or equipment that can be removed and used elsewhere is not may be able to access.
What happens if I cannot make a loan payment?
Contact your Farm Service Agency loan officer when ready. The USDA offers options like payment deferment (postponing a payment to the end of the loan), restructuring (changing the loan term to lower the monthly payment), or forbearance (temporarily reducing payments). Acting quickly gives you more options than waiting until you are in default.