swimming facilities, tennis courts, riding stables, vacation cottages and lodges, lakes and ponds for boating and fishing, docks, nature trails, picnic grounds, and hunting preserves.

What are the terms and interest rate?

Each loan is scheduled for repayment within a period consistent with the borrower's ability to repay taking into account his income from farming, recreation enterprises and any other income he may have. The maximum repayment period of the loan depends on what the funds are used for and the security provided for the loan. Repayments on loans secured by real estate may not exceed 40 years. Repayments on loans for non-real-estate purposes may not exceed 7 years.

The interest rate is 5 percent per year on the unpaid principal. A borrower has the privilege of making payments in advance in years of high income to build up a reserve that may keep the loan in good standing during years of low income.

Each borrower is expected to refinance the unpaid balance of the loan when able to obtain such refinancing at reasonable rates and terms from other lenders. What security is required?

Each loan will be adequately secured to protect the interest of the Government. Security for the loan depends on what the loan funds are used for and may consist of a mortgage on the farm, or on chattels, or on other suitable property. Long-term loans will be secured by a mortgage on the farm. Who may borrow?

To be eligible an applicant must

(1) After taking into account all of his available resources, be unable to provide the needed funds himself or to obtain sufficient credit elsewhere at reasonable rates and terms to finance his actual needs.

(2) Have the background and experience or training needed to be successful in the proposed farming and recreational operation.

(3) Possess the character, industry, and ability to carry out the proposed farming and recreational operation.

(4) After the loan is made, be a tenant or owner operating not larger than a family farm and be receiving a substantial portion of his income from farming.

(5) Be a citizen of the United States and of legal age.

Who determines eligibility?

The county or area committee of the Farmers Home Administration determines the eligibility of the applicants. The committee consists of three farmers who know local farming and credit conditions and what it takes for success. Before acting on an application, the committee may ask the farmer and his wife to meet with them or they may visit the farm.

If the applicant is eligible, what is the next step?

The Farmers Home Administration county supervisor will assist the applicant in working out a farm and home plan including the plan for operation of the recreation enterprise so as to make the best use of land, water, labor, and other resources. This plan will be a guide for the borrower and his family to follow in operating the farm and recreational enterprise. The plan which will include estimates of cost and income will also serve as a guide in determining the soundness of the proposed operation. Before a loan is made it must be clear that the borrower will have enough income to meet operating and living expenses and to repay the loan and other debts.

What determines the size of the loan?

The amount of the loan depends upon the applicant's needs and repayment ability. A borrower's total principal indebtedness for intermediate-term Farmers Home Administration loans for equipment and operating expenses may not exceed $35,000.

A long-term loan secured by real estate may not exceed the normal value of the firm and other security minus any debts against this property and may not exceed the amount certified by the county committee. In no case may such a loan plus other debts against the security property exceed $60,000.

How do these loans aid in rural areas development?

Loans help farm families acquire the resources they need to adjust their farm production, improve their operations, raise their standard of living, increase

their incomes, and participate in new enterprises. stimulates business activity throughout the community.

Where to apply for a loan?

This assistance in turn

A farmer applies at the County Farmers Home Administration office serving the area in which he expects to carry out his farming operations. There he will be given an application and the supervisor will be glad to answer any questions he may have.

Anyone unable to locate the local office may write to the Farmers Home Administration, U.S. Department of Agriculture, Washington 25, D.C.

LOANS TO FAMILY FARMERS FOR FORESTRY PURPOSES

Loans to family farmers for forestry development are made by Farmers Home Administration. These loans may be used to clear and prepare land for tree planting; purchase and plant forest seed or trees; buy land or refinance debts on land that is to be used for forestry purposes; and to pay other costs of producing and harvesting trees.

Loan funds may also be used to carry out approved forestry practices on the farm such as fencing, pest control, thinning, and fire protection.

Each loan is scheduled for repayment within a period consistent with the borrower's ability to repay taking into account his income from forestry products and any other income he may have. The maximum repayment period of the loan depends on what the funds are used for but may not exceed 40 years. A loan for equipment and operating expenses is scheduled for repayment within a period not to exceed 7 years.

Funds in

The interest rate is 3 percent per year on the unpaid principal. the loan for other than forestry purposes bear 5-percent interest. When justified, the first payment of interest and principal on a long-term loan secured by a real estate mortgage may be deferred for up to 15 years.

The applicant is responsible for obtaining technical assistance from the Extension Service, U.S. Forest Service, Soil Conservation Service, State forest technicians, or other competent technicians in developing an acceptable plan on management and operation of his forest farm or farm woodlot.

The amount of the loan depends upon the applicant's needs and repayment ability. Loans secured by chattels may not exceed $35,000; a long-term loan secured by real estate may not exceed $60,000.

EXAMPLE: NORTH CAROLINA FORESTRY LOAN

In Nash County, N.C., a young farmer raising tobacco and livestock borrowed $9,000, including $6,100 to buy 140 acres and $2,900 to finance land development and timber stand improvement on it. He plans to plant 61 acres in pines after removing hardwoods. Income will be derived from the sale of pulpwood and timber. A timber management plan has been prepared for the farmer by a local private firm. Income from the timber pulpwood sales is expected to increase from $700 per year in 1963 to approximately $5,000 by 1983. This income will substantially supplement the family's gross farm and off-farm earnings of $12,000.

LOANS FOR FORESTRY PURPOSES

About three-fourths of the commercial forest land in the United States is privately owned, mostly in small farm tracts. To help family farmers make their farm forests a full producing part of the farm and to make needed adjustments in land use, loans for forestry purposes are made available under the provisions of the Consolidated Farmers Home Administration Act of 1961. Questions and answers explaining details of these loans follow:

How may loan funds be used?

Loan funds for forestry purposes may be used to clear and prepare land for tree planting, purchase and plant forest seed or trees, buy land or refinance debts on land that is to be used for forestry purposes, and to pay other costs of producing and harvesting trees.

Loan funds may also be used to carry out approved forestry practices on the farm such as fencing, pest control, thinning and fire protection.

What are the terms and interest rate?

Each loan is scheduled for repayment within a period consistent with the borrower's ability to repay taking into account his income for forestry products and any other income he may have. The maximum repayment period of the loan depends on what the funds are used for but may not exceed 40 years. loan for equipment and operating expenses is scheduled for repayment within a period not to exceed 7 years.

A

The interest rate is 3 percent per year on the unpaid principal. Funds in the loan for other than forestry purposes will bear 5 percent interest.

Is it possible to defer the first payment on the loan?

When justified, the first payment of interest and principal on a long-term loan secured by a real estate mortgage may be deferred for up to 15 years. Payments may be deferred only when the borrower's total income will be insufficient to make a payment on the loan after considering reasonable operating and family living expenses, capital replacements, and retirement of other debts owed by the borrower in an orderly manner as reflected by a farm and home plan. Deferred payments will not be used to permit rapid accumulation of other resources or to accelerate the payment of other debts.

What security is required?

Each loan will be adequately secured to protect the interests of the Government. Security for the loan depends on what the loan funds are used for and may consist of a mortgage on the farm, or on chattels, or on other suitable property. Long-term loans will be secured by a mortgage on the farm. Who may borrow?

To be eligible, an applicant must:

(1) After taking into account all of his available resources, be unable to provide the needed funds himself or to obtain sufficient credit elsewhere at reasonable rates and terms to finance his actual needs.

(2) Be a citizen of the United States and of legal age.

(3) Possess the character, industry, and ability to successfully carry out the undertakings and obligations required of him in connection with the loan. (4) Agree to develop and carry out an acceptable forestry plan of operation and management.

(5) If the applicant is borrowing funds to pay for land, equipment, machinery, operating expenses, or refinancing he must:

(a) Have a farm background and the farm experience or training needed to be successful in the proposed farming operation.

(b) After the loan is made, be an owner or tenant operating not larger than a family farm.

Who determines eligibility?

The county or area committee of the Farmers Home Administration determines the eligibility of applicants. The committee consists of three farmers who know local farming and credit conditions and what it takes for a farmer to succeed. Before acting on an application, the committee may ask the farmer and his wife to meet with them or they may visit the farm.

What type of forestry plan must the applicant agree to follow?

The applicant is responsible for getting technical assistance from the Extension Service, U.S. Forest Service, Soil Conservation Service, State forest technicians, or other competent technicians in developing an acceptable plan on management and operation of his forest farm or farm woodlot. The plan will include projected yields with operating expenses and estimated income as well as a cruise of existing timber. The cruise report should include information such as an inventory of the kind and amount of timber on the land, the size and growth rate of the predominant type of trees, amount of merchantable timber on the farm, as well as the dates the timber should be marked for sale. Also the plan should show the kind of forestry products to be sold.

What determines the size of the loan?

The amount of the loan depends upon the applicant's needs and repayment ability. A borrower's total principal indebtedness for intermediate-term Farmers Home Administration loans for equipment and operating expenses may not exceed $35,000.

A long-term loan secured by real estate may not exceed the normal value of the farm and other security minus any debts against this property and may not exceed the amount certified by the county committee. In no case may such a loan plus other debts against the security property exeed $60,000.

How do loans for forestry purposes aid in rural areas development!

Forestry loans help farm families acquire the resources they need to adjust their farm production, improve their operations, raise their standard of living, increase their incomes, and participate in new agricultural enterprises. This assistance in turn stimulates business activity throughout the community. Where to apply for a loan?

A farmer applies at the county Farmers Home Administration office serving the area in which he expects to carry out his farming operations. There he will be given an application and the supervisor will be glad to answer any questions he may have.

Anyone unable to locate the local office may write to the Farmers Home Administration, U.S. Department of Agriculture, Washington 25, D.C.

What other financial aid is available from the U.S. Department of Agriculture? In most counties the Agricultural Stabilization and Conservation Service shares the cost of planting and improving farm forests. Owners of farm forest lands wanting cost-sharing assistance should see their county ASC Committee before starting the work.

LOANS TO RURAL GROUPS FOR SHIFTS IN LAND USE

Organizations operating on a nonprofit basis in rural areas, such as nonprofit corporations; irrigation, water supply, and soil conservation districts; grazing or recreation districts; small country towns and other rural political subdivisions, are now eligible for loans from Farmers Home Administration to finance shifts in land use.

Among the specific projects these loans may be used for are conversion of cropland to grazing areas, forests, and other conservation uses; development of wildlife areas; and such recreation areas such as parks, swimming pools, picnic grounds, athletic fields, ski slopes, camping grounds, forest trails, fishing lakes, and access roads in connection with these projects.

Loans for shifts in land use may total $500,000 when made from appropriated funds and $1 million when made from insured funds. Loans are repaid over periods up to 40 years. The interest rate varies, depending on the type of loan, but in no case exceeds 5 percent.

EXAMPLE 1: COLORADO GRAZING ASSOCIATION

The first FHA loan to a nonprofit association to shift land into grazing is being made to a group of 40 family farmers in Prowers County, Colo. The loan, totaling $375,000 is expected to be closed in March. It will finance the purchase and lease of 15,000 acres of which 1,400 is now producing wheat and other crops in surplus. Funds will be used for development of the land for grazing, wildlife, and recreation.

Land being purchased by the association will graze an estimated 1,600 cattle at present. However, with cropland converted to pasture, planned development under the Great Plains program and good range management practices, the cattle carrying capacity may later double. Organizers of the association estimate that initially the annual income of individual members will be increased nearly $2,500 or a total of $100,000 for all members of the association. In addition, habitat for a number of small game animals such as dove, quail, and pheasants will be improved.

Members of the association are presently operating small irrigated farms along the Arkansas River in Prowers County.

Because of a lack of available grazing lands, high rental prices and instability of tenure, there has long been a need for this additional grazing facility to enable farmers on irrigated land to stabilize and balance their farming operations with a livestock program.

The loan will bear 42-percent interest with repayment scheduled over 40 years. A manager will be employed by the association to supervise operation of the grazing area.

All Government agencies in the area will be called on for planning assistance in the shift in land use, range management, conversion of cropland to grass, and recreation and wildlife development. A Great Plains contract with the Soil Conservation Service and use of the Agricultural Conservation Program are planned.

EXAMPLE 2: NORTH CAROLINA COMMUNITY RECREATION ASSOCIATION

A group of residents in and near Norwood, N.C., a small rural town of about 2,000, have applied for a $500,000 loan from the Farmers Home Administration to develop some 200 acres of land for recreation purposes. The development would involve construction of an 18-hole golf course, tennis courts, swimming pools, picnic areas, bridle paths, a boat-launching ramp, and a modest clubhouse.

The site for the proposed project is on the shores of a lake. It is presently being used to produce wheat. Most of the land would be acquired with local resources; funds from FHA would be used to finance development.

The group will be incorporated as a nonprofit corporation by the residents of Norwood and a manager employed fulltime to operate the golf course and other facilities.

LOANS TO RURAL GROUPS

For water systems; irrigation and drainage systems; soil conservation measures; shifts in land use to grazing, forestry, recreation

The Farmers Home Administration makes loans to groups of farmers, ranchers, and rural residents to develop water supply systems for irrigation, household, and livestock use; to drain farmland; and to carry out soil conservation measures. Loans may also be made for shifts in land use to develop recreational facilities, grazing areas, and forest lands. These loans are made under the provisions of the Consolidated Farmers Home Administration Act of 1961, as amended by the Food and Agriculture Act of 1962.

Loans are made only to groups who are unable to obtain the credit they need from other sources at reasonable rates and terms.

Questions and answers explaining details of these loans follow:

Who may borrow?

Organizations operating on a nonprofit basis, such as nonprofit corporations; irrigation, water supply, soil conservation districts, grazing or recreation associations; and small country towns and other rural political subdivisions are eligible for loans when :

1. They are unable to obtain needed credit elsewhere.

2. The proposed improvements primarily serve farmers, ranchers, farm tenants, farm laborers, and rural residents either by direct use or by economic benefits.

3. They have legal capacity to borrow and repay money, to pledge security for loans and to operate the facilities or services to be installed with the loan funds.

4. They are financially sound and will be effectively organized and managed. Who is a rural resident?

He is a permanent resident of a rural area or small country town of not more than 2,500 population which is not part of an urban area.

How may loans funds be used?

Loan funds may be used to:

1. Install or improve rural water supply and distribution systems that furnish water for household, livestock, garden irrigation, orchard and crop spraying purposes, and fire protection. A system may include capacity for commercial and industrial use when the cost of such capacity will be less than the cost of the capacity for other purposes.

2. Install or improve open and closed drainage facilities in farm areas otherwise too wet for sustained agricultural production.

3. Install, repair, or expand irrigation facilities including water supply reservoirs, diversion dams, wells, pumping plants, canals, canal lining, and pipelines. 4. Help soil conservation districts and other groups buy special equipment to establish water development and soil conservation measures, such as terraces,