May 2022 Storms Update: On May 31, the Rural Finance Authority Board determined that an emergency exists in parts of Minnesota due to recent severe weather, which makes zero-interest loans available for Minnesota farmers whose operations may be suffering from damage caused by storms.

The resolution declares an emergency for the following counties: Aitkin, Becker, Beltrami, Benton, Big Stone, Brown, Carlton, Chippewa, Chisago, Clay, Clearwater, Cook, Cottonwood, Douglas, Faribault, Grant, Isanti, Jackson, Kanabec, Kandiyohi, Kittson, Koochiching, Lac Qui Parle, Lake, Lake of the Woods, Lincoln, Lyon, Mahnomen, Marshall, Meeker, Morrison, Murray, Nobles, Norman, Otter Tail, Pennington, Pine, Pipestone, Polk, Pope, Red Lake, Renville, Rock, Roseau, Saint Louis, Sherburne, Stearns, Steele, Stevens, Swift, Todd, Traverse, Wadena, Wilkin, Yellow Medicine, and adjacent counties.

The declaration applies to physical property damage and/or death of livestock taking place due to heavy rains and high winds in May 2022.

2021 Drought Update: On July 14, 2021, the Rural Finance Authority Board has issued a Disaster Declaration for the State of Minnesota which now makes ZERO percent interest loans available for Minnesota farmers whose operations are in counties or contiguous counties suffering from D2+ severe drought.

This loan is available to help a farmer cover lost revenue or expenses not covered by insurance. The funds can be used to purchase feed for livestock that may be short at harvest, the increased cost of feed due to the drought, or to repair or replace farm irrigation systems.

You will work through your local lender to apply for the Disaster Recovery Loan Program. This will be a 55%/45% participation. This means the bank will finance 55% of the loan and RFA will finance the remaining 45% at 0%. Upon the farmer’s completion of an application, your lender will apply for RFA participation. (The RFA must have a completed Master Participation Agreement with your lender on file).

Eligibility Requirements

The farmer candidate must meet the following criteria:

  • Be a Minnesota resident or a domestic family farm corporation or family farm partnership as defined in section 500.24, subd. 2;
  • Certify that the damage or loss was sustained within a county that was the subject of a state or federal disaster declaration, or due to the presence of a highly contagious animal disease, or due to an emergency determined by the RFA; or certify that the farm operations experienced a quantifiable loss of revenue due to human disease resulting in a declaration of a peacetime emergency in the state;
  • Demonstrate an ability to repay the loan;
  • Have received at least 25% of annual gross income from farming for the past year.

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 participation in a qualifying loan is limited to 45 percent of the principal amount up to a maximum of $200,000. Interest rate on the RFA portion of the loan must not exceed 4.0 percent, and is currently set at 0.0 percent. Down payment and collateral requirements will be determined by the agricultural lender and the authority. Loan amortization will be scheduled on flexible terms not to exceed 10 years. Loan payments of interest only are permitted for the first two years. There is no maximum on the size of loan that a participating lender may make under the program.

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.