If you are a farmer and you want to grow your business then it’s very challenging because it was not easy. Here we will tell you how can you get First Time Farmer Loan.
Firstly we will discuss everything about first time farmer loans like requirements, eligibility, benefits and more.
First Time Farmer Loan Program
- Farm Buildings
- Farm Equipments
- Agriculture Land
- Breeding Livestock
Eligibility for First Time Farmer Loan
- Borrowers must be legal Missouri residents at least 18 years old
- Borrower must be able to provide proof of citizenship, identity and legal Missouri residence. If the borrower employs laborers, he/she must also provide proof of enrollment and participation in the federal work authorization program.
- The project must be located within Missouri
- The borrower must have adequate working capital and experience in the type of farming operation for which the loan is sought
- The beginning farmer is one who has not owned, either directly or indirectly, more than 30 percent of the median size of a farm in the county
- After the loan is closed, the borrower’s chief occupation must be farming or ranching, gross farm income must exceed any off-farm income (spouse’s off-farm income does not count in determining eligibility)
- Individuals in partnerships are eligible for loans if all partners meet the eligibility requirements
Some Restrictions for First Time (Begginers) Farmer Loan
- Loans cannot be used to refinance existing debt
- Loans cannot be used for operating expenses, or to purchase inventory, supplies, or livestock other than breeding livestock
- Loans cannot be used to purchase property from a related person unless the acquisition price is for fair market value and, after acquisition, the related person will have no financial interest in the property financed with the loan proceeds
- Not more than five percent of the tax-exempt loan proceeds can be used to finance a house and the costs of issuance. Any down payment may apply toward payment on the house
- The borrower should not enter into a binding contract for any type of property until the application is approved by the authority
First Time Farmer Loan Interest Rate
Beginning farmer loans typically carry interest rates of 20 to 25 percent below prevailing market rates.
The interest rate is 4 percent below the direct FO rate, but not lower than 1.5 percent for First Time or Begginers Farmers Loan.
Beginning or First Time Farmer Loan Requirements
- Applicants must be a resident of Iowa and 18 years of age at the time of application.
- Have a net worth of no more than $737,000.
- Have sufficient education, training or experience for the anticipated farm operations.
- Have access to adequate working capital, equipment, and other items that are necessary to operate the farm.
- Be the owner/operator.
- Own no more land than 30% of the county median acres.
- There is no restriction on off-farm income.
First Time Farmer Loan Plan
- USDA Farmer Loan
- FSA Farmer Loan
- FSA Beginning Farmer Loan