State Beginning Farmer Loan Programs

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Oklahoma Beginning Farmer Loan Program

The Oklahoma Beginning Farmer Loan Program (OBFLP) helps provide additional credit options for those entering farming. The loan can be used to obtain or improve capital items such as agricultural land and property, depreciable machinary and equipment, and/or breeding livestock.  The Oklahoma Development Finance Authority administers the Oklahoma tax-exempt bond program.  Agricultural tax-exempt bond programs, often referred to as "Aggie bonds," are an incentive for lenders or contract sellers to offer loans for beginning farmers (defined later) at a generally lower interest rate.

Kansas Beginning Farmer Program

The program assists farmers who have not previously had or who do not currently have substantial ownership interest in farmland in financing their agricultural businesses to start or keep them in farming. By making loans available at below-market interest rates through private lenders, Kansas Development Finance Authority assists farmers to become valuable assets for the state of Kansas.

Washington Beginning Farmer/Rancher Program

The Washington State Housing Finance Commission, in partnership with Northwest Farm Credit Services,offers loans for qualifying beginning farmers and ranchers that can be combined with other loans, grants and other sources of funds. The Beginning Farmer/Rancher Program is a tax-exempt bond program designed to assist beginning farmers and ranchers in the state of Washington acquire agricultural property at lower interest rates.

Texas Young Farmer Interest Rate Reducation Program

The Young Farmer Interest Rate Reducation Program is administered by the Texas Agricultural Finance Authority and offers low interest commercial lending for farmers 18-45.  The program is intended to facilitate a below-market interest rate to eligible and creditworthy applicants through a commercial lender. The lender must be a financial institution that makes commercial loans, be certified as a state depository by the Comptroller of Public Accounts and agree to participate in the Young Farmer Interest Rate Reduction Program.

South Dakota Beginning Farmer Down Payment Guaranty Program

The South Dakota Department of Agriculture offers a Beginning Farmer Down Payment Guaranty Program, which is available for qualifying beginning farmers that are utilizing the Beginning Farmer Bond program.  The BFDPG Program is not a direct loan fund, but a guaranty on a real estate purchase loan through a local lender.  The program provides a 20 percent guaranty of the bond amount.  This is a pro-rata guarantee and is reduced as payments are applied to principal.  

North Dakota First Time Farmer Finance Program

The North Dakota First Time Farmer Finance Program is a tax-exempt bond program designed to assist First Time Farmers in the state of North Dakota to acquire agricultural property at lower interest rates. Bank of North Dakota (BND), acting as the Farm Finance Agency, determines the eligibility of the applicant and also approves and issues the bond. The bond then is assigned to a Bond Purchaser which typically is a financial institution or contract holder.

North Dakota Beginning Farmer Chattel Loan Program

The Beginning Farmer Chattel Loan Program assists farmers and ranchers purchasing equipment and livestock.   The limit is set at not less than 50% nor greater than 80% of the total loan amount with a lifetime cap of $500,000 per borrower.  The interest rate is fixed at 1% below BND's current base rate with a maximum of 6% per year for the first five years of the loan. Interest is variable at 1% below BND's then current base rate for the next two years, adjusted annually on the anniversary date. The applicant may not have previously farmed for more than 15 years.

North Dakota Beginning Farmer Real Estate Loan Program

The Beginning Farmer Real Estate Loan Program assists farmers and ranchers in the purchase of farm real estate.  Each qualified applicant is eligible for a $500,000 loan. The interest rate is fixed at 1% below the Bank of North Dakota's (BND) current base rate with a maximum of 6% per year for the first five years of the loan. For the second five years of the loan, interest is variable at 1% below BND's then current base rate adjusted annually on the anniversary date. For the remaining period of a loan, interest is variable and adjusted equal to BND’s base rate.

Nebraska Investment Finance Authority Beginning Farmer/Rancher Program

The Nebraska Investment Finance Authority (NIFA) Beginning Farmer/Rancher Program enables farmers or ranchers to obtain loans at interest rates lower than those generally available in the conventional farm credit markets. This is made possible by the issuance of a tax-exempt bond by NIFA, purchased by the farmer/rancher's lender, providing the lender with interest that is exempt from federal and Nebraska state income tax. The lender then sets the rate of interest on the farm loan to reflect the tax-exempt rate on the bond.

Minnesota Beginning Farmer Loan Program

The Beginning Farmer Loan Program was established to help people who want to farm in Minnesota. The program offers affordable financing, a reasonable down payment and built-in safeguards, such as farm management training and financial planning to help minimize the risk all farmers face. This is a partnership approach backed by the State's financial participation. Farmers may finance a purchase or possibly refinance an existing farm debt. Funding an improvement may be possible if done in conjunction with the requested financing package.

Iowa Loan Participation Program

The Loan Participation Program (LPP) was established in 1996 to assist low income farmers secure loans and make down payments. The Iowa Agricultural Development Division's (IADD) participation can be used to supplement the borrower’s down payment, thereby helping a farmer secure a loan more readily. The lender’s risk is also reduced since the IADD provides a "last-in/last-out" loan participation for the financial institution.

Iowa Beginning Farmer Loan Program

The Iowa Beginning Farmer Loan Program (BFLP) was established in 1981 to assist new farmers in acquiring agricultural property. Beginning Farmer Loans are financed by participating lenders or contract sellers with the issuance of federal tax-exempt bonds offered by the Iowa Agricultural Development Division (IADD). Interest received on contract sales or direct loans by individuals is also exempt from state income taxes. The tax-exempt interest income earned by lenders and contract sellers enables them to charge the beginning farmers a lower interest rate.

Illinois Young Farmer (Farm Purchase) Guarantee Program

The Illinois Young Farmer Guarantee Program (YFG) is a loan guarantee program designed to enhance credit availability for younger farmers who are purchasing capital assets. Loan funds may be used for new purchases of capital assets such as land, buildings, machinery, equipment, breeding livestock, soil and water conservation projects, etc. In some cases, up to 50 percent of the loan proceeds may be used to refinance existing debt as needed to improve lien positions.

Illinois Beginning Farmer Bond Program

The purpose of the Beginning Farmer Bond Program is to provide affordable financing to new, low net worth farmers for financing capital purchases. The Illinois Finance Authority (IFA) works with the borrower's local lender to provide this financing. IFA issues a tax exempt bond for the amount and with the terms of the loan. Because the interest income to the lender is exempt from federal income tax, the lender is able to charge a lower rate to the borrower.

Hawaii New Farmer Loan Program

The Hawaii Department of Agriculture offers direct  loans to full-time farmers.  New Farmer Loans are for applicants who intend to farm full-time. A full-time farmer is a person who devotes most of their time to farming or derives most of their income from farming operations. A down payment or equity contribution equal to 15% of the total project cost is required from the applicant.  Loans of up to a 40 year term may be extended for farm ownership and improvement applicants.  Ten year loan periods are available for financing operating expenses.

Colorado Beginning Farmer Loan Program

The Colorado Agricultural Development Authority (CADA) loan program is known as the Beginning Farmer Program. The program involves a three-way transaction between the lender, the borrower and CADA. Through the issuance of a tax exempt bond by CADA to the lender, all interest paid by the borrower is tax exempt. The result is an interest rate to the borrower below commercial rates.  Because interest paid to the lender under this program is tax-exempt, the lender should be willing to charge interest rates substantially below commercial rates.

Arkansas Beginning Farmer Loan Program

This program was designed to assist beginning farmers in the state of Arkansas acquire agricultural property (land, buildings, equipment and breeding stock) at lower interest rates. The program enables lending institutions, individuals, partnerships and corporations to receive tax-exempt interest for direct loans or contract sales made to beginning farmers. A person must be a "First Time Farmer" to be eligible for assistance under the program.

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