Programs
 Beginning Farmer
Bond Program
This program provides
affordable financing to farmers by using federally tax exempt
bonds ("Aggie Bonds") to reduce the interest rate
on a loan to purchase farmland. This program can be
used between a
buyer and his/her local lender or between a buyer and the
seller for a contract purchase. The lender or contract
seller make all credit decisions for the loan. Loans
may be used to purchase capital assets including farmland,
new or used farm improvements or buildings, new equipment,
and used equipment when purchased with farmland. Loan
proceeds may not be used to finance a residence. The
maximum loan size is $250,000.
Eligibility requirements include:
- Illinois resident at least 18 years old;
- Net worth of less than $500,000;
- Borrower will be the principal user of the capital item;
- Have not owned a significant amount of farmland.
More information about the Beginning
Farmer Bond Program
Farm Purchase Guarantee
The Farm Purchase Guarantee Program (FPG) is designed to enhance credit availability for farmers, ranchers, and agribusinesses to purchase farm land. Loans may be made to purchase farmland, construct or repair buildings and other facilities, and improve farmland to promote soil and water conservation. In some cases, up to 50% of the loan may be used to refinance existing debt
In conjunction with the IFA Secondary Market Loan Program, lenders are encouraged to utilize the Secondary Market Program when initiating a Farm Purchase Guarantee (FPG) loan in order to obtain more favorable financing terms for the borrower.
Eligibility requirements include:
- Illinois resident at least 18 years old;
- Principal operator of a farm who derives at least 50% of gross income from farming;
- Net worth of at least $10,000;
- Debt/asset ratio of borrower cannot exceed 70% after the project is considered;
- Cash flow and collateral must be adequate for the loan.
More information about Farm Purchase Guarantee Program
State Guarantee Program
for Restructuring Agricultural Debt-
This
loan program allows a farmer to consolidate existing debt
and spread the payments out over a longer term. Loans
are made through a local lender and the lender will receive
an 85% guarantee on the principal and interest of the loan. The
maximum loan size is $500,000 and 30 years is the longest
term available. The interest rate can be variable or
fixed and must be less than the market rate of interest generally
available to the borrower.
Eligibility requirements include:
- Illinois resident at least 18 years old;
- Principal Operator of a farm who derives at least 50% of gross
income from farming;
- Debt/assets ratio is between 40 and 65% on a current balance
sheet;
- Cash flow and collateral must be adequate for the loan.
More information on the Restructuring
Program
Specialized Livestock Guarantee
Program
 This program is designed to
provide family sized livestock operations the access to capital
needed to enter, upgrade, or expand their livestock business. Local
lenders receive an 85% guarantee of the principal and interest
on the loan. Loan proceeds may be used for the purchase
of capital
assets used in livestock production. This includes
construction, purchase or remodeling of livestock facilities
and the purchase of equipment and/or breeding livestock. Purchases
can not be made more than six months prior to IFA loan approval. The
maximum loan size is $1,000,000 and maximum term is 15 years. The
interest rate can be variable or fixed, and the interest
rate must be less than the market rate of interest generally
available to the borrower.
Eligibility requirements include:
- Borrowers or the owners of a partnership or corporation must
be an Illinois resident at least 18 years old;
- Applicant must be the principal operator and materially involved
in the operation;
- Debt/asset ratio of borrower generally should not exceed 70%
after the project is considered unless risk reduction measures
are undertaken;
- Cash flow and collateral must be adequate for the loan.
More information about the Specialized
Livestock Program
Value Added Stock Purchase
These
loans are made by local lenders who receive an 85% guarantee
on the principal and interest of loans to Illinois farmers planning
to purchase stock in value-added entities that further process
their commodities. Loan proceeds are used to purchase stock
in a value added entity. In conjunction with a purchase,
debt may be refinanced to improve lien position or financial structure,
up to the amount of the purchase. A portion of the stock
can be used as collateral for this loan. The maximum loan
size is $100,000 and maximum term is 10 years. The interest
rate can be variable or fixed and must be less than the market
rate of interest generally available to the borrower.
Eligibility requirements include:
- Borrowers, the owners of a partnership or corporations must
be an Illinois resident at least 18 years old;
- Applicant must be the principal operator and materially involved
in the operation;
- Debt/asset ratio of borrower generally should not exceed 70%
after the project is considered unless risk reduction measures
are undertaken;
- Cash flow and collateral must be adequate for the loan.
More information about Stock Purchases
 Young Farmer Guarantee Program
This
program allows farmers to make capital purchases that will expand
or upgrade their operation. Loans are made by local lenders
who receives an 85% guarantee
of the principal and interest on the loan. The loan proceeds
may be used for the purchase of farm related capital assets including
farmland, machinery, and breeding livestock. The maximum
loan size is $500,000 and maximum term is 15 years. The interest
rate can be variable or fixed and must be less than the market
rate of interest generally available to the borrower.
Eligibility requirements include:
- Illinois resident at least 18 years old;
- Principal operator of a farm who derives at least 50% of gross
income from farming;
- Net worth of at least $10,000
- Debt/asset ratio of borrower cannot exceed 70% after the project
is considered;
- Cash flow and collateral must be adequate for the loan.
More information on the Young Farmer
Program
State Guarantee Program
for Agri-Industries
This program is
designed for farmers and agribusinesses that wish to diversify
into new enterprises or to further process existing crops
or livestock. Loans can be made to farmers or agribusinesses
to purchase new or used property, equipment, or other capital
items that will be used for one of the following purposes:
- Growth and development of new crops or livestock not
customarily grown in Illinois, or
- The further processing of grain or livestock grown in the state.
Loans are made through a local lender who receives an 85% guarantee
on the principal and interest of the loan. The interest rate
can be variable or fixed and must be less than the market rate
of interest generally available to the borrower.
Eligibility requirements include:
- Illinois resident at least 18 years old;
- Principal operator of a farm or land;
- at least 50% of gross income is from farming;
- Gross income is at least $20,000 based on previous years tax
return;
- Net worth is less than $500,000;
- An agribusiness must be located in Illinois and the products
used must be grown in Illinois currently or soon to be;
- Cash flow and collateral must be adequate for the loan.
More information on the Agri-Industries
Program
Guaranteed Secondary Market Loan Program
IFA assists Illinois Bankers by offering a secondary market program for IFA Guaranteed Loans. Through this program the Authority allows lenders to better manage interest rate risk and increase fee income. The lender may resell the guaranteed portion of the loan to a qualified buyer of their choice, through MABSCO Capital, Inc, the fiscal and transfer agent as well as servicing agent for all IFA Guaranteed Loans. For the loan to qualify for resell to the secondary market, the eligibility requirements must be met for that specific guarantee program. The Secondary Market program allows banks to benefit from increased return on investment, increased liquidity, increased service fees, access to a broader range of rates and terms for the borrower, streamlined paperwork and reporting requirements, and up-to-date program statistics.
To learn more about our Secondary Market Program, contact an IFA Agriculture Funding Manager: agteam@il-fa.com
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