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Show Credit to Farmers requests, FmHA made the rule change allowing the interest write down in lieu of a write off. The borrowers loan payments must be the same under this optioa Director Hawkes said the new rules will enable many lenders to help some farmers; whose loans are classified as substandard. "Lenders, who feel this Debt Adjustment Program can help, will review loans they now ha ve with farmers who are having trouble repaying. They will determine whether or not the farmer could make payments if the loan Is reduced by at least ten percent. If so, the lender can come to FmHA to get our guarantee on part of the remaining debt. "With the assurance that a large portion of the debt is guaranteed, the bank or other lender is in a better position to extend credit to farmers for production expenses this spring," Director Hawkes said. Even this additional assistance will not reach every farmer who Is having economic problems. The farmer must be able to show that debt payments can be made within the expected cash flow. To do this, ' the farmer's expected Income from all sources must exceed expenses by ten percent. Expenses include debt payments, tax payments, and family living expenses as well as production. "With the cooperation of banks, other lenders, and FmHA, many good farmers who, for reasons beyond their control, are suffering financial stress will be able to continue their operations," Mr. Hawkes said. The new regulations are being sent from the national office in Washington to the nearly 2,000 local FmHA offices, including the 17 county offices in Utah, as soon as possible. |