The Farm Labor Housing Loan and Grant program is aimed at providing the necessary working capital financing for the development of housing for domestic farm laborers. These loans and grants are provided to enable housing for farm laborers to be bought, built or repaired. The farm laborers in this case includes people who earn their income in aquaculture (that is, those working on fish and oyster farms) and those engaged in on-farm processing. The funds provided by the Farm Labor Housing Loan and Grant program may be used in several ways, including:

• Purchase of a site or leasehold interest in a site
• Construction of housing, daycare facilities and community rooms
• Payment of fees to purchase household furnishings
• Payment of construction loan interest

There are several groups of people that are eligible for the farm labor housing loans. These include farmers, associations of farmers, family farm corporations, Indian tribes, nonprofit organizations, public agencies and associations of farmworkers. Usually, the people who apply for these loans do so because they are unable to obtain credit elsewhere. However, in some instances, farmers who are able to obtain credit elsewhere do get the loans at a rate of interest that is based on the cost of federal borrowing. On the other hand, the grants are made to farmworker associations, Indian tribes, public agencies and nonprofit organizations. These funds may be used in urban areas for nearby farm labor.

The terms of the loans are as follows: the maximum length of the loan is 33 years, at 1 percent interest. If you do obtain a grant, it may cover up to 90 percent of the costs of development. The balance can be topped up with a loan. Farm owners may also seek alternative financing for development and other working capital needs, a small business cash advance, for example, involves a quick application process requiring minimal paperwork and any credit situation is ok, making these private loans an excellent alternative to government lending programs.

For the application process, the first thing that happens is that a Notice of Funds Availability (NOFA) is published. After this, a two-stage process commences. In the first stage, applicants submit a pre-application which is used to determine eligibility and feasibility. The applicants who make it through this first stage are invited to submit applications for the loans and grants.

For many farmworkers, getting access to decent housing is a problem, considering the income may not allow for construction of quality housing units, or furnishing of the same. Fortunately, the federal government recognizes this and works to ensure that quality housing is available.

If you are interested in learning more about the  Farm Labor Housing Loan and Grant program, contact your Rural Development field office.