The Farm Opportunity Loan Program is designed to finance the purchase of equipment to add value to crops or livestock, adopt best management practices, reduce agricultural inputs to improve the environment, and increase on-farm energy production.  Eligible loan uses do not include expenses related to seed, fertilizer, fuel, or other operating expenses.  Refinancing of existing debt is not an eligible expense.

This is a loan participation program available through the Rural Finance Authority (RFA). Farmers will work through their local lender. Upon completion of an application, the lender will apply for RFA participation.  The RFA must have a completed Master Participation Agreement with the lender on file.

Eligibility Requirements

The farmer candidate must meet the following criteria:

  • Be a resident of Minnesota or general partnership or a family farm corporation, authorized farm corporation, family farm partnership, or authorized farm partnership as defined in section 500.24, subdivision 2;
  • Be the principal operator of the farm;
  • Demonstrate an ability to repay the loan;
  • Hold an appropriate feedlot registration or be using the loan under this program to meet registration requirements;

Participating Lenders

While all lending institutions are eligible to be part of the program, they are not required to do so. Their decision to join the program is voluntary.

Each lender must enter into an agreement with the RFA and offer farm loans based upon certain pre-established rules in order to qualify for RFA participation.

Loan Terms

The RFA may participate in a Farm Opportunity loan equal to 80 percent of the project or equipment cost. Participation is limited to 45% of the principal amount of the loan or $45,000 per individual, whichever is less. For loans to a group made up of four or more individuals, participation is limited to 45% of the principal amount of the loan or $180,000, whichever is less.

The loan will be for a maximum of ten years. The interest rates and repayment terms of the authority’s participation interest may differ from the interest rates and repayment terms of the lender’s retained portion of the loan, but the authority’s interest rate is currently 2%. The authority may review the interest annually and make adjustments as necessary.

The originating lender will retain the balance of each loan. The borrower must satisfy the local lender’s guidelines. The local lender will control the day-to- day operation of the loan. Participating lenders are allowed to charge a fixed or adjustable interest rate consistent with their normal lending practices and their agreement with the RFA.

The RFA will provide a 1% interest rate reduction from the standard 2% rate if a farmer uses this loan program to purchase equipment in which an associated equipment safety course is offered. The farmer must complete and submit documentation for the equipment training course to be eligible for the rate reduction.