The U.S. Department of Agriculture (USDA) and Iowa Agricultural Development Division of the Iowa Finance Authority (IFA) offer several government-assisted loan options for those in the farming and ranching industry. These programs assist our local farmers by helping them obtain the capital needed to get an operation up and running and provide a safety net for their future.
The USDA and Lincoln Savings Bank partner together on the Farm Ownership Participation Program and Down Payment Ownership Loan Program. Both options provide low interest rates and assist with up to 50% of the loan amount, with a requirement of 3-5 years of operational experience.
Farm Ownership Participation Loan
The Farm Ownership Participation Loan allows you to maintain adequate cash on hand and manage working capital. This type of loan is to be used for the purchase of a farm, construction of buildings and other permanent improvements, and environmental improvements. The maximum loan amount is $600,000 with a repayment term of up to 40 years. USDA can furnish up to 50% of the funds and LSB can furnish up to 50% of the funds to qualified applicants.
Down Payment Farm Ownership Loan
The Down Payment Farm Ownership Loan is available to beginning farmers and targets underserved applicants, such as minorities and women. These funds are only to be used for the purchase of a farm with a maximum loan amount of $300,150 with a 20-year fixed rate, and 5% down payment. Maximum USDA funds are 45% of the transaction amount, with LSB providing the remainder to qualified applicants.
The Iowa Finance Authority also offers the Beginning Farmer Loan Program which assists new farmers in acquiring farmland, buildings, machinery, equipment or breeding livestock at a reduced interest rate. The interest rate on this type of loan can range to 20 to 25 percent below the typical market rate. This cannot be used to refinance existing debt.
The Beginning Farmer Loan Program can be used in conjunction with the USDA program or as a stand-alone product for projects that do not qualify for USDA funds. Lincoln Savings Bank and our expert ag lenders can help you obtain these government-backed farm ownership and operating loans. To determine if you qualify for any of these programs, call us at 800-588-7551or visit MyLSB.com/ag.