Minnesota State Rural Finance Authority Lending Programs
Citizens Bank Minnesota is an approved lender to participate with the Minnesota Rural Finance Authority Loan Programs. The State loan programs are established to help individuals who farm in Minnesota and offers affordable financing at reasonable rates and terms. The State offers multiple lending programs ranging from buying a farm, building livestock facilities or restructuring existing farm debt. The State of Minnesota participates with the local lender in providing the credit needs to Minnesota farmers.
The most popular program is the Basic Farm Loan Program which is used to purchase farmland. The farmer must be a resident of Minnesota. They must be a full time farmer or intend to become a full time farmer. The loan applicant’s maximum net worth is $409,000.00. The local Bank is the primary lender and finances 55% of the first mortgage on the property with the Bank’s normal rates and terms. 45% of the loan will be financed by the Rural Finance Authority up to a maximum of $300,000.00. The farmer applicant works with the lending officer at our Bank to fill out the application and loan documentation requirements. All loan payments are remitted to the Bank and the Bank forwards the State’s portion of the payment to St. Paul. The State requires the borrower to be enrolled in Farm Management Classes and obtain all necessary State and County permits.
The Minnesota Rural Finance Authority also has an Agricultural Improvement Loan Program. This loan program is for any physical improvement to the farm operation and a first real estate mortgage is required on the entire farm. The State of Minnesota participates at 45% of the first mortgage to a maximum of $300,000.00.
The Minnesota RFA has a livestock expansion loan program which finances the construction of new efficient livestock facilities. To be eligible for this program, the farmer applicant cannot have a maximum net worth exceeding $772,000.00. The State of Minnesota will participate at 45% of the mortgage amount to a maximum of $400,000.00. The farmer must be a full time farmer and have all necessary feedlot permits.
The Livestock Equipment Pilot Loan Program is to purchase livestock related equipment. Equipment purchased will be security for the loan. RFA will participate at 45% of the equipment loan amount up to a maximum of $40,000.00.
The State of Minnesota’s Restructure II Program is to provide restructuring for existing agricultural debt only. A first real estate mortgage is required. The RFA participates at 45% of the first mortgage amount to a maximum of $400,000.00. The maximum net worth of the loan applicant cannot exceed $772,000.00 and the operation must have a positive cash flow.
As you can see, there are a variety of lending programs through the State of Minnesota which are available for our farm customers. Our experienced Bank lending officers and staff can assist a loan applicant in preparation of the financial statements, cash flows, and application and make the process very easy for you.
By: Kevin Yager, Vice President