BEGINNING FARMER LOAN PROGRAM
This program was designed to assist beginning farmers in the state of Arkansas acquire agricultural property (land, buildings, equipment and breeding stock) at lower interest rates. The program enables lending institutions, individuals, partnerships and corporations to receive tax-exempt interest for direct loans or contract sales made to beginning farmers. The maximum principal amount of the loan cannot exceed $250,000. Used depreciable equipment not exceeding $62,500 may be included in this amount. Loans may not be used to acquire property from a related person. Funds to be used for the acquisition or construction of a residence may not exceed 3 percent of the principal amount of the loan.
A person must be a "First Time Farmer" to be eligible for assistance under the program. A "First-Time Farmer" is an individual who has not at any time had any direct or indirect ownership interest in substantial farmland which he operated or materially participated in operating. Substantial farmland is any parcel of land that has or has ever had a fair market value of $125,000 and/or is larger than 15 percent of the median size of a farm in the county in which the parcel is located.
To participate in the program, the borrowers and lenders will jointly submit applications provided by ADFA. The local lender arranges the loan, including the interest rate, length of loan, repayment schedule, security and collateral needed. The ADFA will issue a tax-exempt private activity bond to finance each loan. The loan and its collateral will be assigned to the lender as security for the bond.
FOR MORE INFORMATION ABOUT THE BEGINNING FARMER LOAN PROGRAM CALL 1-501-682-5900.