ELKHART (AP) — Farmers in six northern Indiana counties and two in Michigan hit by an October tornado are now eligible for emergency loans to repair or replace damaged property.

The USDA declared only Elkhart County a disaster area in its Dec. 20 order, but farmers in the seven contiguous counties can also apply for the loans, said Steve Rodenberg, executive director of Elkhart County's Farm Service Agency office.

Farmers in all eight counties can apply for loans for up to $500,000 for physical losses caused by the Oct. 18 tornado that struck the region. The Nappanee area was hardest hit, with the storm destroying dozens of homes and businesses.

But last month, the Federal Emergency Management Agency turned down disaster assistance for Nappanee, saying damage to the private sector was not severe enough to warrant a major disaster declaration and federal assistance.

Gov. Mitch Daniels has appealed FEMA's decision.

Under the USDA's declaration, farmers can submit loan applications through Aug. 20, 2008.

Aside from Elkhart County, the eligible counties are: Kosciusko, LaGrange, Marshall, Noble and St. Joseph counties in Indiana and Cass and St. Joseph counties in Michigan.

Farmers whose operations sustained physical damage in the storm can apply for assistance to restore their farms to pre-disaster conditions.

Eligible farmers are those who depend on farming for a significant part of their living, cannot obtain credit elsewhere and are U.S. citizens. The current interest rate for FSA emergency loans is 3.75 percent.