New loan approval rule for FSA loans

May 15, 2025 | Bethany Baratta

The U.S. Department of Agriculture’s Farm Service Agency (FSA) is now required to seek approval from the Department of Government Efficiency to issue loans over $500,000.

According to memo sent by FSA Deputy Administrator Houston Bruck, the policy requiring authorization from both the Office of the Secretary and DOGE is in compliance with President Donald Trump’s executive order.

All loans and guarantees of $500,000 or more and to “formal entities” like corporations now need to be approved by the two offices, Reuters reported.

“We recognize the potential impact that this effort may have on our customers, lending partners, and FSA staff, and are committed to ensuring minimal disruption to service delivery,” said USDA's Farm Service Agency administrator Bill Beam in a note sent along with the memo, according to Reuters.

The Iowa Soybean Association has not viewed the memo seen by Reuters, but posed the following questions to USDA in seeking clarification of this new directive:

• What made this additional step—approval from the Farm Service Agency and the Department of Government Efficiency (DOGE)—necessary?
• When do you foresee this additional clearance put into place? If it’s in place now, when did it start?
• How much extra time should farmers expect as their loans work through this approval process?
• Could farmer loans be cancelled or walked back as a result of this enhanced process? Why/why not?
• It was recently reported that 674 county FSA employees took financial incentive offers to leave the agency, how will this impact farmers?

USDA responded to the questions with the following:

“To fulfill EO 14222, the USDA Efficiency Team reviews many loans, guarantees, and payments.

While most direct aid to individuals is exempt from the process, the team does assess payments over $500k for fraud and national security concerns. These reviews are currently prompt and without undue delay to the program recipient.

Concerning the Deferred Resignation Program: President Biden and Secretary Vilsack left USDA in complete disarray, including hiring thousands of employees with no sustainable way to pay them.

Secretary Rollins is working to reorient the department to be more effective and efficient at serving the American people, including by prioritizing farmers, ranchers, and producers. She will not compromise the critical work of the Department.

As part of this reorientation, the Deferred Retirement Program (DRP), a completely voluntary tool, was used to empower employees to decide what is best for them. As of May 1st, 15,182 individuals voluntarily elected deferred resignation. FPAC totals 4,094.

It is also important to note that on April 22, Secretary Rollins issued a Secretarial Memorandum exempting National Security and Public Safety positions from the federal hiring freeze. These 53 position classifications carry out functions that are critical to the safety and security of the American people, our National forests, the inspection and safety of the Nation’s agriculture and food supply system. As the memo states, “Food Security is National Security,” and Secretary Rollins will not compromise this critical work.”

FSA provided 22,600 direct and guaranteed loans to farmers totaling $4.72 billion in fiscal year 2023, a report shows. Iowa farmers obtained 1,840 of those loans totaling $410,664,000.

Article written by Bethany Baratta.

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