The Minnesota Department of Agriculture announced Wednesday, Feb. 27 the Rural Finance Authority’s (RFA) Restructure Loan program to help farmers for refinancing debt.
The RFA program is available for Minnesota farmers seeking assistance, if they have good credit but are having trouble with cash flow due to adverse events. This program is related to agricultural debt only and requires collateral of a first mortgage on farm real estate.
“This may be a good option for Minnesota farmers who are in good standing with their local lender but are struggling with cash flow,” said RFA Senior Loan Officer Ryan Roles. “The current interest rate is 4.25 percent and the participation term may be up to a maximum of 10 years.”
The farmer must be a resident of Minnesota, a Minnesota domestic family farm corporation or a family farm partnership. They must also be the principal operator of the farm.
The farmer works through their local lender and jointly complete an application for RFA participation. They many be a current or previous participant in an RFA farm debt reorganization program. Participation is also restricted to loans that do not exceed 80 percent of the appraised value of real estate comprising the collateral.
The farmer’s total net worth cannot exceed $1,777,000 (indexed for inflation). A minimum of 50 percent of their gross income must have been from farming over the past three years. Expenses cannot exceed 95 percent of income.
More information on the Restructure Loan Program and all RFA loan programs is available at www.mda.state.mn.us/restructure.
A list of participating lenders that have been approved to submit applications for loan participations in the various RFA loan programs is available at www2.mda.state.mn.us/webapp/lenders/lenders.jsp.