H.R. 1991 — Producer and Agricultural Credit Enhancement Act of 2025

This section increases maximum loan amounts under the Consolidated Farm and Rural Development Act for (1) farm ownership loans, to $850,000 for direct loans (from $600,000) and to $3,500,000 for guaranteed loans (from $1,750,000), with inflation adjustments (based on the Prices Paid by Farmers Index) beginning in FY2025 (from FY2019); and (2) operating loans, to $750,000 for direct loans (from $400,000) and to $3,000,000 for guaranteed loans (from $1,750,000), with inflation adjustments beginning in FY2025 (from FY2019). (Farm ownership loans finance land acquisition, improvements, and related facilities primarily for beginning, limited-resource, and socially disadvantaged farmers; operating loans cover annual production costs and family living expenses.)

This section revises the calculation of the inflation percentage used to adjust maximum unpaid indebtedness limits for certain farm ownership loans—from one based on the Prices Paid by Farmers Index for specified 12-month periods to an equal-weighted average of per-acre U.S. farm real estate value, cropland value, and pasture value for the preceding calendar year (as published in USDA's National Agricultural Statistics Service Agricultural Land Values report), compared to the prior year. (Thus, the $600,000 limit for direct loans under 7 U.S.C. 1925(a) and $1,750,000 limit for guaranteed loans—both applicable to loans under sections 1922, 1923, 1924, 1934, and 1935 and adjusted annually since FY2019—will now reflect land value changes rather than farmers' input costs.)

This section eliminates the $667,000 cap on the principal amount of down payment loans under the farm ownership loan program (previously limiting such loans to 45% of the least of the purchase price, appraised value, or $667,000), such that loans do not exceed 45% of the lesser of the purchase price or appraised value (subject to overall farm ownership loan limits under section 305(a)). (Thus, the program—which provides subsidized loans to eligible beginning farmers and ranchers for down payments on farm or ranch purchases—may now support acquisition of higher-value properties.)

This section directs the Secretary of Agriculture, acting through the Farm Service Agency (FSA), to promulgate regulations not later than one year after enactment allowing the refinancing of certain distressed guaranteed FSA loans (i.e., under farm ownership or operating loan programs) into direct FSA loans if (1) the borrower unsuccessfully attempted to work with the lender, (2) a reasonable chance exists for the success of the financed operation (i.e., identified problems can be corrected to achieve a sound financial basis), and (3) other criteria to protect taxpayer funds and FSA programs are met. The section requires that such refinancing has no impact on FSA guaranteed or direct loan subsidy rates, authorizes refinancing a guaranteed loan under one FSA program into a direct loan under another FSA program as appropriate, and subjects the new direct loans to existing maximum amount limitations (e.g., under 7 U.S.C. 1925).

This section states the sense of Congress that (1) access to credit is essential to the success of farmers and ranchers, and (2) microloans, direct loans, and guaranteed loans provided by the Farm Service Agency should be fully funded to meet producer demand, help beginning farmers and ranchers, and support family farms.