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Farm loans for Indian tribes and members starting today

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Staff writer ▼ | December 1, 2015
The U.S. Department of Agriculture (USDA) announced that it is expanding the availability of farm loans for Indian tribes and members to purchase tribal farmland that has multiple owners.
Native American
Farming   The improved lending opportunities
The improved lending opportunities are possible due to new authority granted by the 2014 Farm Bill, which allows USDA to provide revolving loan funds to qualified intermediary lenders that can relend the funds to qualified tribes and individuals.

The program becomes available today, December 1, 2015.

Under the 1887 Dawes Act, Indian reservation land was divided and allotted to individual tribal members such that with the passing of each generation, title ownership was divided and parceled among heirs, while the land was not.

As a result, land once owned by a single person could today be owned by hundreds or thousands of individuals, resulting in what is known as “highly fractionated Indian land.” In many instances, landowners are unknown or cannot be located, which complicates the coordination of ownership or prevents the use of the property altogether.

There are more than 245,000 owners of three million fractionated land interests, spanning approximately 150 Indian reservations.

Under the rules published today, USDA will now allow tribes and tribal members to submit a farm loan application to an intermediary lender. To participate, intermediary lenders first must be approved by USDA.

The lenders may be private and tribal nonprofit corporations, public agencies, Indian tribes, or lenders subject to federal or state regulation such as a credit union or other financial institution.

FSA will lend to the intermediary, which will relend to the applicant. The intermediary lender also will administer the loan for the applicant.


 

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