Aggie Bond Beginning Farmer Loan Program

About this funding opportunity

Aggie Bond Beginning Farmer Loan Program

The Aggie Bond Loan Program is a federal bonding program administered by the State through its Rural Finance Authority. The program offers affordable financing for a qualified beginning farmer. This is accomplished by securing for the applicant a reduced interest rate on the loan they are submitting for approval under the program. Eligibility Requirements

A beginning farmer is a person who intends, over time, to become a full time farmer. This definition will exclude established farmers who already own farmland and are expanding their operations. Land speculators and investors looking for tax advantages are also not eligible.

The beginning farmer candidate must also meet the following eligibility tests. A beginning farmer must: Be an individual who is a resident of Minnesota. Must have a net worth of less than $1,069,000 in 2026 (indexed annually for inflation), including assets and liabilities of their spouse and dependents. Must _never_ have owned more than 30% of the county median size farm where they reside. Have a financial need for a loan and the ability to repay the loan. Have sufficient education, training or experience to succeed in the type of farming that they intend to practice. Be purchasing land, animals or machinery that will be located in Minnesota. Must intend to be the principal operator of the type of operation involved in the application. Agree to enroll in a farm business management program approved by the Minnesota Commissioner of Agriculture for at least the first three years of the loan, if an approved program is available within 45 miles of the borrower's residence. Agree to consult with a local Board of Water and Soil Resources office or the county Natural Resources Conservation Service. May wish to obtain credit life insurance for the amount of the debt incurred to purchase the security.

Additional income may be earned off the farm by an eligible family member. The RFA recognizes that many farm families will need non-farm income to supplement farm earnings, especially in the early years of farm operations.

These eligibility tests also allow people who currently rent farm land and those who have very limited ownership to be eligible for the Aggie Bond Program.

Consultation with a Farm Business Management Instructor may help you determine if the farming operation you are planning can be profitable and self supporting. Eligible Purposes

Qualified beginning farmers may purchase productive agricultural farmland; new or used depreciable agricultural property such as livestock used for breeding purposes or dairy products (feeder cattle, feeder pigs or feeder lambs do not qualify), and farm machinery including trucks. Making an improvement to a farm is also an eligible purpose. Who Finances an Aggie Bond Loan

This program may be financed by your local commercial lender. The program also allows for private financing from an individual or an estate (neither of which can be a close relation).

The financing entity is required to give a reduced interest rate on the type of loan being made. While there is no set discount required by program rules, the RFA will generally expect that the interest rate being offered is a minimum of two to two and one-half percent below the current rate being charged for said type of loan.

You may borrow up to an aggregate of $616,000 under this program. In other words, you may have more than one loan under this program as long as each time that you apply, you remain eligible under the current rules.

For example, you could have borrowed $200,000 to buy new equipment, another $50,000 to purchase some animals, and still have $293,800 remaining to purchase real estate.

Note, that when purchasing used depreciable property you are limited to a total of only $62,500. Also, when purchasing new depreciable farm property, such as buildings, machinery and breeding livestock, you are limited to a total of $250,000. Other Loan Terms

All other…

Topic areas: Agriculture and Food, Public Policy and Governance, Workforce Development.

Funding amount

This other provides Varies in funding.

Deadline

Applications are accepted on a rolling basis; there is no single fixed deadline.

Who can apply

This opportunity is open to the following applicant types:

• Not specified by the program.

Eligibility

The program did not publish a separate eligibility statement. See the official opportunity page for the full eligibility criteria.

Agency

Aggie Bond Beginning Farmer Loan Program is administered by Minnesota Department of Agriculture (MDA), listed via Minnesota Department of Agriculture.