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First Time Farmer Finance Program
The North Dakota First Time Farmer Finance program (NDFTFFP) is a tax-exempt bond program designed to assist First Time Farmers in the state of North Dakota to acquire agricultural property at lower interest rates. The Bank of North Dakota (BND), acting as the Farm Finance Agency, determines the eligibility of the applicant and also approves and issues the bond. The bond will then be assigned to a Bond Purchaser which typically is a financial institution or contract holder. Since the interest received by the Bond Purchaser is exempt from state and federal tax, the interest rate to the First Time Farmer is at a lower rate.
Qualifying Requirements
Borrower - A First Time Farmer is required to meet the following criteria:
- A ND resident at time of funding
- A First Time Farmer must be at least 18 years of age. There is no upper age limit.
- A First Time Farmer is a person who has never had any direct or indirect ownership interest in Substantial Farmland in the operation of which he/she has materially participated. An ownership interest or material participation by a person's spouse or child will be attributed to the person as well.
- A First Time Farmer must have a net worth of not more than $500,000.
- The agricultural land, agricultural improvements and depreciable agricultural property shall be used for farming by the First Time Farmer, spouse, or minor children.
Use of Proceeds - Finance the purchase of ND land suitable for use in farming, finance
the construction or purchase of improvements located on agricultural land,
or the purchase of personal property suitable for use in farming for which
an income tax deduction for depreciation is allowed in computing federal
income taxes. The loan maximum is $469,200 for agricultural land and improvements.
No more than $250,000 of the $450,000 aggregate loan amount can be used
for Agricultural Improvements and Depreciable Agricultural Property. In
addition, within the $250,000 limitation, no more than $62,500 can be used
for Depreciable Agricultural Property.
Collateral - Collateral is to be negotiable between bond purchaser and the borrower.
Application Process
Application forms are available from BND. The application should be completed by the First Time Farmer and Bond Purchaser and submitted to BND. Completed applications will be acted upon within five business days of receipt by the Bond Purchaser.
Interest Rate
The interest rate is a tax-exempt rate to be negotiated by the First Time
Farmer and the Bond Purchaser.
Repayment Terms
The repayment terms are to be negotiated by the First Time Farmer and the
Bond Purchaser.
Fees
The First Time Farmer or Bond Purchaser must submit to BND a non-refundable
$100 application fee. A loan fee equal to 1% of the amount of the bond,
but not less than $500, must be paid to BND by the First Time Farmer at
loan closing. The loan fee may be financed with bond proceeds, or in the
case of a contract sale, the loan fee may be included in the purchase price
reflected in the sales contract.
Program Summary
Download the Program Summary for more information on this program or contact:
Bank of North Dakota
1200 Memorial Hwy
PO Box 5509
Bismarck, ND 58506-55099
(701) 328-5786
1-800-472-2166 ext. 5786
TDD (Telephone Device for the Deaf) 1-800-643-3916
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