Loan Amounts & Terms
The loan terms (interest rate, length of term, etc.) are negotiated between the lender and the borrower. The term of the loan may not exceed 30 years. The interest rate on the loan must be at a rate that is below what the lender would charge on a similar type of loan not financed with proceeds of a tax-exempt bond.
Subject to the limitations described below, the principal amount of the NIFA agricultural loan may not exceed $524,200* (*adjusted annually for inflation/deflation). Of this amount, no more than $250,000 may be used to finance any depreciable property and no more than $62,500 of such amount may be used to finance used depreciable property or breeding stock. The purchase price of the agricultural land or depreciable property may be greater than $524,200; in such case, the borrower will need additional equity or will need to acquire other financing for the amount in excess of $524,200.
With the prior approval of NIFA and the lender, a loan made to a farmer or rancher may be assumed by another party if the party assuming the loan meets the NIFA qualifications.
A third party (acceptable to the lending bank) may guarantee the repayment of the agricultural loan by the farmer or rancher.