What financing is available for young farmers?

The BFC monitors several areas of financing options for those interested in entering farming. The most important step is determining what type of enterprise you wish to start or expand and what are the costs involved. ISU has 13 Area Farm Financial Planning Specialists that are able to perform feasibility studies and cash-flow analysis for a proposed situation. This helps in determining what resources are needed.

The Iowa Agricultural Development Authority (IADA) provides the Beginning Farmer Loan Program and the Livestock Water Quality Facilities Program.

The Beginning Farmer Loan Program has low interest loans to assist beginning farmers in acquiring agricultural property and it's qualifications include but are not limited to the following:

• Minimum age of 18 with no upper age limit
• May not own more land than 30% of county’s median farm size
• Maximum net worth of $300,000
• Must be owner/operator of the project- with no restrictions on off-farm income

The Livestock Water Quality Facilities Program has low interest loans to improve the environmental management of livestock facilities. This program is available for lagoons, fencing, pumps, waste collection and processing equipment and has the following qualifications:

• Assistance is limited to animal feeding operation sites with a one time animal unit capacity (AUC) of less than 1000
• Operations must have been built before December 31, 2001
• Applicants must have a comprehensive nutrient management plan (CNMP)
• Must be the owner and have legal control of the operation
• Loan amount up to 100% of project costs, minimum loan of $10,000

The program benefits of the IADA loan programs are: farmers receive a lower rate of interest on a loan because lenders receive tax exemptions on interest from loans and there is no government interference when negotiating terms of the loan. Down payment assistance helps farmers secure loans because the IADA participation reduces a lenders risk. The banker establishes a long-term relationship with farmers. These loans can be used in conjunction with other federal and state grants and loans.

The Farm Service Agency provides the Loan Participation Program which is available to assist low-income farmers secure loans and supplement down payments. The Loan Participation Program qualifications include but are not limited to the following:

• Minimum age of 18 with no upper age limit
• Maximum loan of 30% of purchase price and no more than $100,000
• Maximum net worth of $300,000
• No restrictions on amount of total land owned
• Total off-farm income may not exceed 50% of total income

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