Agriculture Secretary Tom Vilsack announced the USDA is providing $67 million in loans through the new Heirs’ Property Relending Program (HPRP). HPRP seeks to help agricultural producers and landowners resolve heirs’ land ownership and succession issues by financing the purchase or consolidation of property interests and financing costs associated with a succession plan, according to the department.
“USDA is committed to revising policies to be more equitable and examining barriers faced by heirs’ property owners is part of that effort,” Vilsack said in a statement. This helps ensure that we protect the legacy of these family farms for generations to come.”
Loans will be made available through intermediary lenders, such as cooperatives, credit unions, and nonprofit organizations once the Farm Service Agency selects eligible lenders. Heirs’ property issues have long been a barrier for many producers and landowners to access USDA programs and services, and this lending program provides access to capital to help producers find a resolution to these issues, according to USDA. Selected lenders will determine the rates, terms, and payment structure for relending loans to heirs.
Funds for HPRP were directed in the 2018 Farm Bill that would “assist folks to begin the process of consolidating land ownership and opening up the gateway to many programs and opportunities,” as Vilsack stated. As loans are repaid, it will create a revolving loan fund that will provide opportunities in future years for those who are experiencing fractionated properties.
Lenders will make loans to heirs who are individuals or legal entities with authority to resolve succession of a farm with multiple owners; are a family member or heir-at-law related by blood or marriage to the property’s previous owner; and agree to a succession plan.
Heirs’ property refers to family land inherited without a will or legal documentation of ownership, thus providing challenges for heirs to benefit from USDA programs because they believe that they cannot get a farm number.
“Today’s announcement by Secretary Vilsack and the Biden administration is the translation of our legislative solution into action for heir property owners,” said Rep. Sanford D. Bishop, Jr. (D-GA-2) at the announcement. “Through the relending program, heir property owners will now have a greater means to resolve these issues, to preserve their farms and their families’ land and better engage all the opportunities that are available to them through the programs available at the USDA.”
The loans can cover costs such as buying out fractional interests of other heirs in jointly owned property to clear the title, as well as closing costs, appraisals, title searches, surveys, preparing documents, mediation, and legal services.
Loans cannot be used for any land improvement, development purpose, acquisition or repair of buildings, acquisition of personal property, payment of operating costs, payment of finders’ fees, or similar costs.
More information on how heirs can borrow from lenders under HPRP will be available in the coming months. To learn more about heirs property or HPRP, you can visit farmers.gov/heirs/relending. — Charles Wallace, WLJ editor