23. Agriculture Best Management Practices (BMPs) Loan Program
Contact: local water planning officials or your Soil and Water Conservation District (SWCD).
This program loans money to farmers, agricultural supply businesses, and rural landowners for implementing practices that prevent or mitigate nonpoint source water pollution and are listed as priorities in locally developed water plans. Eligible activities may include, but are not limited to: animal waste control facility improvements (for less an 1,000 animal units); terraces, grass waterways, and other practices that prevent erosion; conservation tillage equipment; individual sewage treatment system improvements; and abandoned well sealing. A county government or SWCD applies for loan funds from the Minnesota Department of Agriculture. These local government units then approve agricultural borrowers and their BMPs for which funds will be used. Borrowers pay back the loan to the local lender. Loans may not exceed $50,000 for any individual or project. Lenders may charge up to 3% interest plus a one-time 0.5% origination fee. Loan lengths range from 2 to 10 years depending on the practice.

24. Emergency Loan Assistance
Contact: Farm Service Agency (FSA) in your phone book under U.S. Department of Agriculture.
Emergency loans from the FSA help cover production and physical losses in counties declared disaster areas by the President or Secretary of Agriculture. Physical loss loans are also available in counties where the FSA administrator determines a natural disaster has occurred. The producer must be an established farmer who suffered a physical loss or production loss of at least 30% in any essential farm or ranch enterprise. Emergency loan funds can be used to restore or replace essential property, pay all or part of production costs associated with the disaster year, pay essential family living expenses, reorganize the farming operation, and refinance debts. The emergency loan limit is up to 80% of actual production loss or 100% of the actual physical loss, with a maximum indebtedness of $500,000. Loan applications must be received within eight months of the disaster designation date. The current interest rate is 3.75%, but changes periodically. The repayment period is 1 to 7 years for non-real estate purposes and up to 40 years for physical losses on real estate. Applicants must pay a credit report fee. If the loan is approved, the applicant pays the fees charged for lien searches and for filing and recording security instruments. A loan applicant may be an individual, corporation, cooperative, joint operation, or partnership. The applicant must have sufficient education, training, or experience in managing and operating a farm to succeed; be a United States citizen or legal resident alien; have the legal capacity to incur the loan obligations; be unable to obtain sufficient credit elsewhere at reasonable rates and terms; be the operator of a family farm; have not had a previous Direct or Guaranteed Loan which resulted in a loss to the FSA and not be delinquent on any federal debt. Producers may be required to complete farm and financial training courses, provide periodically updated financial information, and participate in an annual review of their operation by an Agricultural Credit Manager.

25. Farm Operating Loans
Contact: Farm Service Agency (FSA)in your phone book under U.S. Department of Agriculture.
Farm operating loans may be used to purchase items needed for a successful farm operation, such as livestock, farm equipment, feed, seed, fuel, farm chemicals, insurance, minor improvements to buildings and, under certain conditions, to refinance debts. The FSA may loan up to $200,000 directly or it can guarantee loans up to $400,000 from commercial lenders. Interest rates are based on FSA borrowing costs. The repayment period is 1 to 7 years. For Direct Loans, the applicant must pay a credit report fee. If the loan is approved, the applicant pays the fees charged for lien searches and for filing and recording security instruments. For Guaranteed Loans, application fees must not exceed those charged to a lender’s normal farm customers. In some cases, FSA charges the lender a guarantee fee which may be passed on to the borrower. Collateral consists of a first lien on crops to be produced and on livestock and equipment purchased or refinanced with loan funds. A lien may be taken on certain other chattel and real estate property, and an assignment usually will be taken on income such as that from a dairy enterprise. A loan applicant may be an individual, corporation, cooperative, joint operation, or partnership. The applicant must have sufficient education, training, or experience in managing and operating a farm to succeed; be a United States citizen or legal resident alien; have the legal capacity to incur the loan obligations; be unable to obtain sufficient credit elsewhere at reasonable rates and terms; be the operator of a family farm; have not had a previous Direct or Guaranteed Loan which resulted in a loss to the FSA; and not be delinquent on any federal debt.

An individual or business applicant that has operated a farm or ranch for 10 years or less may qualify for a Farm Operating Loan under provisions for a beginning farmer or rancher. If the applicant is a business entity, all members must be related by blood or marriage, and all stockholders in a corporation must be eligible beginning farmers or ranchers.

Producers may be required to complete farm and financial training courses, provide periodically updated financial information, and participate in an annual review of their operation by an Agricultural Credit Manager.

26. Farm Ownership Loans
Contact: Farm Service Agency (FSA) in your phone book under U.S. Department of Agriculture.
A Direct Loan from the FSA or an FSA Guaranteed Loan from a commercial lender may be used to purchase farmland, construct or repair buildings and other fixtures, and develop farmland to promote soil and water conservation. Guaranteed Loans also may be used to refinance debt. The maximum FSA Direct Loan is $200,000; the maximum FSA Guaranteed Loan is $300,000. Loan applicants may choose to participate in a joint financing plan in which FSA lends up to 50% of the amount financed, and another lender provides the balance. The FSA’s interest rate in such a joint plan is not less than 4%. The repayment period is up to 40 years. For Direct Loans, the applicant must pay a credit report fee. If the loan is approved, the applicant pays the fees charged for lien searches and for filing and recording security instruments. For Guaranteed Loans, application fees must not exceed those charged to a lender’s normal farm customers. In some cases, FSA charges the lender a guarantee fee which may be passed on to the borrower. Collateral consists of real estate only or a combination of real estate and chattels. A loan applicant may be an individual, corporation, cooperative, joint operation, or partnership. The applicant must have sufficient education, training, or experience in managing and operating a farm to succeed; be a United States citizen or legal resident alien; have the legal capacity to incur the loan obligations; be unable to obtain sufficient credit elsewhere at reasonable rates and terms; be the operator of a family farm; have not had a previous Direct or Guaranteed Loan which resulted in a loss to the FSA; and not be delinquent on any federal debt.

Some applicants may qualify for a Farm Ownership Loan under provisions for beginning farmers or ranchers. If the applicant is an individual or business entity, they must have operated a farm or ranch for at least 3 years, but not more than 10 years, and must not own a farm greater than 25% of the average size farm in the county. If the applicant is a business entity, all members must be related by blood or marriage, and all stockholders in a corporation must be eligible beginning farmers or ranchers.

A beginning farmer or rancher may qualify for a Down Payment Farm Ownership Loan. If the applicant makes a cash down payment of at least 10% of the purchase price, FSA may finance 30% of the purchase price or appraised value, whichever is less. The loan term is 10 years at a fixed interest rate of at least 4%. The remaining balance, not to exceed 60% of the purchase price, may be obtained from a commercial lender or a private party. FSA can provide up to a 95% guarantee if financing is obtained from an eligible commercial lender. The purchase price or appraised value, whichever is lower, may not exceed $250,000.

The FSA also advertises acquired farm property within 15 days of acquisition. Eligible beginning farmers and ranchers are given first priority to purchase those properties at the appraised market value for the first 75 days after acquisition. Producers may be required to complete farm and financial training courses, provide periodically updated financial information, and participate in an annual review of their operation by an Agricultural Credit Manager.

27. Indian Land Acquisition Loans
Contact: Farm Service Agency in your phone book under U.S. Department of Agriculture.
These loans enable Indian tribes to purchase private lands within their reservations. Loan funds may be used to pay expenses incidental to the land purchase, but not for land development.

28. Rural Youth Project Loans
Contact: Farm Service Agency (FSA) in your phone book under U.S. Department of Agriculture.
The FSA loans funds to rural youth to establish and operate income-producing projects of modest size in connection with their participation in 4-H clubs, Future Farmers of America, and similar organizations; or under supervision of a vocational teacher or county Extension educator. Loans can finance almost any kind of income-producing project. Some common projects include livestock and crop production, lawn and garden services, repair shops, catering service, art and craft sales, and roadside stands. Money may be used to buy animals, equipment, and supplies; buy, rent, or repair needed tools and equipment; and pay operating expenses. Up to $5,000 may be borrowed. The interest rate changes periodically, but is currently 6.5%. The applicant must sign a promissory note and be responsible for repaying the loan. In some cases a cosigner may be required. Loan collateral normally consists of products produced for sale, livestock, equipment, and other items purchased with loan funds. Repayment schedules are negotiable, depending on when products or services are sold. Applicants must be U.S. citizens or other legal permanent residents, at least 10 but less than 21 years old, live in the open country or in a town of less than 10,000 people, and be unable to get a loan from other sources. The youth must be capable of planning, managing, and operating the project under guidance and assistance from a project advisor who must recommend the project and the loan and agree to provide adequate supervision.