Close this search box.

Table of Contents

Farmers Home Administration (FmHA)


The Farmers Home Administration (FmHA) was a United States government agency established in 1946 to provide financing and credit support to farmers and rural communities. It primarily offered loans, grants, and technical assistance for housing, agriculture, and infrastructure development in rural areas. In 1994, the FmHA was restructured and absorbed into the newly created United States Department of Agriculture (USDA) Rural Development Program.


The phonetic pronunciation for “Farmers Home Administration (FmHA)” would be: FAHR-murz hohm ad-min-uh-STRAY-shuhn (FmHA)

Key Takeaways

  • The Farmers Home Administration (FmHA) was a United States government agency established in 1946 that provided financial assistance to farmers, ranchers, and rural communities. Its main goal was to aid in the development of stable family farming and rural areas by guaranteeing loans and providing credit to qualified applicants who were unable to obtain financing through conventional means.
  • FmHA functioned under the United States Department of Agriculture (USDA) and often collaborated with other governmental institutions, such as the Rural Electrification Administration and the Resettlement Administration. These collaborations helped in the provision of funding, infrastructure, and services that improved the socioeconomic conditions of rural communities.
  • In 1994, the Farmers Home Administration was replaced by the USDA Rural Development program. This change was part of the Federal government’s effort to streamline its operations and improve the provision of essential services to rural America. Rural Development still carries on FmHA’s mission by offering various financial and technical assistance programs to support housing, community facilities, and other crucial infrastructure projects within rural areas.</li></ol>


The Farmers Home Administration (FmHA) is an important term in business and finance as it refers to a former agency of the United States Department of Agriculture (USDA). Established in 1946, the FmHA was primarily tasked with providing financial assistance, in the form of loans and grants, to farmers and rural residents to help improve their living conditions and encourage rural development. This support greatly benefited farmers and rural communities by promoting agricultural growth, enabling access to housing, and improving essential facilities – services vital for economic stability and growth in these areas. Even though the FmHA was replaced by the USDA Rural Development in 1994, its historical role as a lifeline for rural America underscores its significance in the realms of business and finance.


The Farmers Home Administration (FmHA) was established with a key purpose of providing financial assistance and support to farmers and rural communities in the United States. It aimed to meet their needs through various lending programs, offering credit facilities for essential services such as agriculture, housing, and rural development. FmHA lent a hand to individuals and families struggling to secure loans from commercial banks by offering flexible credit with reasonable interest rates and extended loan terms. Moreover, it facilitated communal progress by investing in the development of vital infrastructure projects like water and waste disposal systems, hospitals, and emergency services.

FmHA was instrumental in bolstering rural economies, uplifting living standards, and stabilizing local markets by investing in the agricultural sector. By providing timely financial assistance, FmHA ensured the continuity of farming operations during tough times, such as unfavorable economic conditions or natural disasters. Furthermore, it offered a platform for capacity building among farmers by providing educational and technical assistance to enhance productivity and embrace sustainable practices. This, in turn, enabled farmers to remain competitive in the market and uplift the overall performance of the agricultural industry. Although FmHA was replaced by the USDA Rural Development program in 1994, its legacy as an essential resource for farmers and rural communities remains significant in the United States.


1. Example 1: A farmer in rural Kansas struggling to obtain a loan from private financial institutions in the 1970s used the Farmers Home Administration (FmHA) as an alternative source of credit. The FmHA provided the farmer with a low-interest loan, enabling them to purchase new farming equipment and expand their agricultural operations. This support led to an increase in crop yield, improved farm efficiency, and a boost in the rural economy

.2. Example 2: A young couple living in a small town in South Dakota in the 1980s sought to buy their first home but were unable to secure a mortgage from traditional lenders due to insufficient down payment and a lack of credit history. The Farmers Home Administration offered them an affordable government-backed loan, enabling them to buy a modest house in their community. The FmHA’s housing programs not only gave the couple the opportunity to own property but also contributed to affordable housing in rural communities.

3. Example 3: In the early 1990s, a farming community in Georgia was devastated by a natural disaster, leaving many farmers with damaged infrastructure and ruined crops. The Farmers Home Administration provided emergency loans and financial assistance to affected farmers to help them rebuild their lives and businesses. The FmHA’s involvement not only aided individual farmers in getting back on their feet but also played a critical role in reviving the local agricultural industry.

Frequently Asked Questions(FAQ)

What is the Farmers Home Administration (FmHA)?

The Farmers Home Administration (FmHA) is a former U.S. government agency that was established in 1946 to provide financial assistance and support to farmers and rural communities. It was part of the U.S. Department of Agriculture (USDA) and was responsible for providing loans and grants for housing, business development, and infrastructure improvements in rural areas.

What was the primary purpose of the Farmers Home Administration?

The primary purpose of the FmHA was to assist rural farmers and communities by providing them with financial support through loans, grants, and other initiatives. The intention was to improve the quality of life in these areas and promote economic development.

How did the Farmers Home Administration provide loans to farmers?

The FmHA provided loans to farmers at low-interest rates, offering them financial support for various activities such as purchasing land, machinery, and livestock, as well as constructing or rehabilitating housing and farm buildings. The FmHA also offered assistance with debt restructuring and loan refinancing in times of financial hardship for farmers.

Is the Farmers Home Administration still active today?

No, the Farmers Home Administration was replaced by the Farm Service Agency (FSA) in 1994, which now carries out many of its former responsibilities and services. Additionally, the Rural Housing Service (RHS) was established to handle the housing-related functions of the FmHA.

What types of loans were provided by the Farmers Home Administration?

The FmHA provided various types of loans, including direct loans and guaranteed loans. Direct loans were provided by the federal government, while guaranteed loans were provided by private lenders who received a guarantee from the FmHA for a portion of the loan. These loans were directed towards housing, farm ownership, and operating expenses.

Who was eligible to receive assistance from the Farmers Home Administration?

Assistance from the FmHA was primarily targeted towards farmers and rural communities in the United States. However, eligibility varied depending on the specific program or initiative. Generally, eligibility criteria included being a U.S. citizen, owning or operating a farm or residing in a rural area, and demonstrating a need for financial assistance.

How did the Farmers Home Administration help rural communities?

The FmHA assisted rural communities by providing loans and grants for the improvement of housing, infrastructure, and community facilities. This assistance enabled communities to improve water and waste systems, fire and police stations, hospitals, and other essential facilities, thereby contributing to the overall well-being and development of the rural areas.

Related Finance Terms

  • Rural development loans
  • US Department of Agriculture (USDA)
  • FmHA Insured Loans
  • Rural Housing Service (RHS)
  • Agricultural Credit Association (ACA)

Sources for More Information

About Our Editorial Process

At Due, we are dedicated to providing simple money and retirement advice that can make a big impact in your life. Our team closely follows market shifts and deeply understands how to build REAL wealth. All of our articles undergo thorough editing and review by financial experts, ensuring you get reliable and credible money advice.

We partner with leading publications, such as Nasdaq, The Globe and Mail, Entrepreneur, and more, to provide insights on retirement, current markets, and more.

We also host a financial glossary of over 7000 money/investing terms to help you learn more about how to take control of your finances.

View our editorial process

About Our Journalists

Our journalists are not just trusted, certified financial advisers. They are experienced and leading influencers in the financial realm, trusted by millions to provide advice about money. We handpick the best of the best, so you get advice from real experts. Our goal is to educate and inform, NOT to be a ‘stock-picker’ or ‘market-caller.’ 

Why listen to what we have to say?

While Due does not know how to predict the market in the short-term, our team of experts DOES know how you can make smart financial decisions to plan for retirement in the long-term.

View our expert review board

About Due

Due makes it easier to retire on your terms. We give you a realistic view on exactly where you’re at financially so when you retire you know how much money you’ll get each month. Get started today.

Due Fact-Checking Standards and Processes

To ensure we’re putting out the highest content standards, we sought out the help of certified financial experts and accredited individuals to verify our advice. We also rely on them for the most up to date information and data to make sure our in-depth research has the facts right, for today… Not yesterday. Our financial expert review board allows our readers to not only trust the information they are reading but to act on it as well. Most of our authors are CFP (Certified Financial Planners) or CRPC (Chartered Retirement Planning Counselor) certified and all have college degrees. Learn more about annuities, retirement advice and take the correct steps towards financial freedom and knowing exactly where you stand today. Learn everything about our top-notch financial expert reviews below… Learn More