USDA guaranteed lending news for the 3rd quarter of 2026 was less about new program rules and more about Washington deadlines. The Farm Bill cleared the Senate Agriculture Committee on its second try but will not become law before the current extension (the 3rd since 2023) expires on September 30. Congress kept the government open through December 11, and Rural Development finally has a confirmed Under Secretary. Here is what matters for your bank.
Farm Bill: Through Committee, Past the Deadline
The Senate took two tries. On August 6, the Agricultural Act of 2026 failed on a 10 to 11 party-line vote over the timing of state SNAP cost-sharing. Chairman Boozman recessed rather than adjourning, and on September 16 the committee passed the bill on a 12 to 11 vote, with Senator McConnell casting the deciding vote. Boozman is ready to negotiate with the House in October, but a Senate floor vote is not expected until after the November elections.
The most important thing in the Senate bill for USDA guaranteed lending is that it lines up with the House on guarantee fees. According to the committee's section-by-section summary:
One provision we have followed all year is missing from the Senate side. Section 6303 of the House bill would bring back the Food Supply Chain guaranteed loan program as a permanent part of B&I. The original program financed food aggregation, processing, storage, and distribution projects up to $40 million, ran on American Rescue Plan money, and closed when that money was gone. The Senate bill has no counterpart in its section-by-section summary, so reinstatement is still alive, but only as a House position to be traded in conference. We would call it a coin flip at best. For food processing and distribution clients today, standard B&I is the path, and it works well for these deals.
The Farm Bill extension expires September 30, and the September 2 stopgap did not extend it. That matters less for B&I and OneRD than the headlines suggest, since those programs run on annual appropriations. The real pressure comes from the farm-side programs, and we expect either a final bill or a fourth extension in the lame-duck session.
Government Funding: Open Through December 11
On September 2, the President signed the Continuing Appropriations and Extensions Act, 2027 (Public Law 119-103), funding the government at FY2026 rates through December 11. There is no October 1 shutdown, and Rural Development keeps processing applications and issuing guarantees.
The House passed its FY2027 agriculture appropriations bill 213 to 210 on June 4, and the Senate still has work to do. If a B&I deal needs an obligation or Loan Note Guarantee this fall, plan around December 11. We would rather submit complete applications in October and November than sit in a queue if Congress misses the next deadline.
A Confirmed Leader at Rural Development
On August 7, the Senate confirmed Glen Smith as Under Secretary for Rural Development, and he was sworn in on August 21. Smith is an Iowa farmer and farm appraiser who chaired the Farm Credit Administration board from 2019 to 2022.
Having chaired the regulator of the Farm Credit System, Smith should bring a focus on prudent underwriting and servicing. Paired with the lender removals in May, that favors banks that underwrite carefully and document well, which is exactly where we help.
Dates to Watch
Looking Ahead
The fourth quarter will be decided in Washington: a Farm Bill that could finally land with a guarantee fee cap, and a December 11 funding deadline that will shape how quickly USDA can obligate. If you have deals in the pipeline, now is the time to get them in front of Rural Development. As always, reach out anytime.
Warm regards,
Your friends at Guaranteed Lending Specialists
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