Using FSA Loans with NRCS Conservation Programs

• nrcs
• conservation
• fsa

How are FSA and NRCS different?

FSA and the Natural Resources Conservation Service are both USDA agencies, often found in the same service center, but they do different jobs. FSA handles farm loans and many farm programs. NRCS provides technical help and financial assistance for conservation practices, through programs such as EQIP.

Because they are separate, you apply to each, follow each one's rules and keep each informed. A program decision from one does not guarantee a decision from the other.

A short call to the local NRCS office is a good place to start. Staff can explain current sign-up periods, since many programs accept applications during set windows and rank them against other farmers' requests.

Why would a farmer use both?

NRCS programs generally reimburse part of the cost of an approved practice after it is installed and verified, or may offer advance payment options for some participants. That leaves you to cover costs up front. A farm loan or operating credit can help cover the gap, if the practice is an allowed purpose and the plan supports repayment.

Examples include fencing, water systems, grazing infrastructure, or soil health tools, though which practices qualify for NRCS support depends on local priorities and your state's rules.

Ask about advance payment options if cash flow is the main concern. NRCS describes an advance payment option for certain participants, and it may reduce how much you must borrow.

What is the usual order of steps?

Planning order matters. NRCS usually requires you to be approved and have a contract before you start a practice if you want it funded. Starting early can disqualify you. Talk to NRCS before buying materials or hiring a contractor.

Then talk to your loan officer about financing your share. Share your NRCS plan and the expected payment timing so they understand when cost-share reimbursement is expected. Take photos before, during and after the work, since proof of the original condition and the finished practice may be needed to confirm that standards were met.

• Meet NRCS and develop a conservation plan
• Wait for contract approval before starting work
• Ask FSA about financing your share
• Install the practice to standards
• Keep receipts for verification

How do lenders view cost-share?

A loan officer will want to see that the project makes sense for your farm even if payment is delayed or smaller than hoped. Do not count on cost-share as certain income. Contracts can be competitive, and payment rates can differ from your actual costs.

Include only the amounts that are written in your signed contract. Make a budget for the full cost and show how you would pay if the payment arrives late. Think about the maintenance period too. A practice that must be kept in place for a set number of years becomes part of your yearly budget, including repairs and replacement costs.

What records do I need to keep?

Keep your NRCS contract, plans, practice specifications, invoices and photos. Keep proof of payment for everything you buy. NRCS may need documentation before it releases a payment, and the loan officer may want to see the same records.

Save copies of your farm records number and eligibility information that both agencies require. Consistent records across both offices avoid delays.

Remember that taxes also apply. Cost-share payments can have tax consequences, so ask your CPA how to report them. IRS Publication 225 is the starting reference.

What mistakes should I avoid?

The top mistake is starting work before an NRCS contract is in place. Another is financing a project based on a payment rate you have not confirmed. A third is forgetting that conservation practices come with maintenance duties for a set period.

Read the contract for requirements, and ask what happens if you cannot complete the practice on schedule.

What should I ask both agencies?

Prepare a short list. Ask each office to explain how its program treats the other.

Write down names and dates. Ask whether a change in your plan, such as renting additional land, affects the conservation contract or the loan. Both agencies appreciate hearing about changes early.

• Is this practice eligible for financial assistance now?
• Does starting early affect my eligibility?
• When would any payment arrive?
• Does my loan permit this use of funds?
• What maintenance does the contract require?

Last reviewed: November 12, 2026. Written by the Farm Money & Grants Editorial Team. Educational only, not tax, legal or financial advice. See our editorial policy.