Heirs’ Property Relending Program Announced
By: Sydney Sheffield
Tom Vilsack, the United States Department of Agriculture’s (USDA) Secretary of Agriculture announced that the USDA will provide $67 million in competitive loans through the new Heirs’ Property Relending Program (HPRP), aimed to help agricultural producers and landowners resolve heirs’ land ownership and succession issues, specifically in minority communities. The Farm Service Agency (FSA) will open a signup service later this month, so intermediary lenders, cooperatives, credit unions, and nonprofit organizations can apply for loans up to $5 million at 1% interest.
“While those affected are in all geographic and cultural areas, many Black farmers and other groups who have experienced historic discrimination have inherited heirs’ property,” Vilsack said. “USDA is committed to revising policies to be more equitable and examining barriers faced by heirs’ property owners is part of that effort. This helps ensure that we protect the legacy of these family farms for generations to come.”
The 2018 Farm Bill included provisions for this program, but the Trump Administration did not take the steps to establish the program. The USDA notes that the HPRP is a loan and will need to be repaid, as directed by the 2018 Farm Bill. The Biden Administration was eager to implement the program, as it was one of Biden’s campaign promises.
The USDA states that FSA will favor lenders who have experience with socially disadvantaged farmers, experience with similar loan programs, or with heirs’ applications that are already in process. The goal of this preferential treatment of lenders is to advance economic equality for farmers of color. Heirs’ property is estimated to make up 1/3 of southern black-owned land. Historically, black farmers in the US have lost their land after handing it down from generation to generation due to a lack of documentation or access to resources to prove ownership, according to Politico.
After the FSA selects the lenders, heirs can apply directly through said lenders. The USDA implemented this program due to heirs’ property issues being a barrier for many producers and landowners to access other established USDA programs and services. The USDA states the program will help keep farmland in farming, protect family farm legacies, and support economic viability.
Heirs may use the loans to resolve title issues by financing the purchase or consolidation of property interests and financing costs associated with a succession plan. This may also include costs and fees associated with 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.
The program is supported by House Agriculture Committee Chairman David Scott stating, “I want to thank Secretary Vilsack and the USDA staff for standing up and rolling out the Heirs’ Property Relending Program that was authorized in the 2018 Farm Bill. The decline in land ownership among Black farmers is a national tragedy, and I am thankful that Congress finally took steps to try and address heirs’ property issues in the last farm bill.”