A loan participation program to assist eligible farmers to finance capital improvements to their farming operation. The program may help to improve production, efficiency, and increase farm income.

Agricultural improvements mean improvements to a farm, including the purchase and construction or installation of improvements to land, buildings and other permanent structures. This includes equipment incorporated in or permanently affixed to the land, buildings, or structures which are useful for and intended to be used for the purpose of farming. For this program, agricultural improvements also includes wind energy conversion facilities with an output capacity of one megawatt or less.

The farmer will work through their local lender. If the lender agrees to make a mortgage loan to the applicant, the lender and applicant will jointly complete an application for an RFA participation. The RFA must have a completed Master Participation Agreement with the lender on file. The RFA may participate on a loan up to 45% of the loan principal to a maximum of $400,000. Loan proceeds may be used to refinance a limited amount of existing debt.

The participation term may be up to a maximum of 10 years. The loan may have a balloon. Collateral for the loan must include a first mortgage on farm real estate, but this does not have to include the farmstead.

The incentive to use the RFA program will be an affordable fixed interest rate for a fixed period of time. Call the RFA for a quote. There is a $50.00 non-refundable application fee on all loans. The lender may collect normal closing costs.

The borrower must be a Minnesota resident, a Minnesota domestic family farm corporation or a family farm partnership. The borrower or one of the borrowers must be the principal operator of the farm. The borrower may not have a total net worth, which exceeds $1,013,000 in 2024 (indexed annually for inflation).