The Biden administration is looking to help eliminate some of the ownership and succession issues that arise for many agricultural producers that inherit land. Last month, the establishment of the Heirs’ Property Relending Program (HPRP) was announced where the U.S. Department of Agriculture (USDA) will oversee the distribution of $67 million in competitive loans.
The Farm Service Agency (FSA) considers heirs’ property to be land that is passed down from an individual to subsequent generations. Individuals can do this through intestate succession (without a will) or through a will, in which the real estate assets are divided equally among all heirs.
According to an article from the Alabama Cooperative Extension System (ACES) Robert Tufts, an Alabama Extension visiting professor and member of the farm and agribusiness management team, said there are several succession issues that can occur.
“Heirs’ property creates joint ownership, which means joint management,” Tufts said. “As the number of individuals with an interest in the property increases, agreement on management of the property becomes more difficult.”
According to Tufts, the way to solve the disagreements among owners is through partition, which divides the interests in land. Issues also can occur for those that inherit land through intestate succession.
As a part of the HPRP, the FSA will first select a group of qualified lenders to implement the loans. And Monday, USDA announced that intermediary lenders can now apply for loans through the new program. They will accept applications through October 29, 2021, and cooperatives, credit unions and nonprofit organizations are encouraged to apply for these competitive loans, which ultimately will help agricultural producers and landowners resolve heirs’ land ownership and succession issues.
Click here to learn more about the new HPRP.