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Farm Operating Loan Program
The North Dakota legislature has established a loan program to assist with
farm operating loans.
Qualifying Requirements
Borrower - A borrower is a "farmer" who is a resident of the State, owns
or operates an existing farm or ranch, and who is at least eighteen (18)
years old.
Net Worth - A maximum net worth requirement has not been established. However, legislative
action requires that a borrower's debt-to-asset ratio must exceed 50%,
or a net worth of less than $500,000.
Local Lender - A local lender is required to initiate the loan participation
and is responsible for servicing the loan.
Use of Proceeds - BND may participate in loans for the operation of an
existing farm or ranch. These operating expenses include, but are not limited
to:
- The current year's cash rent.
- Grassland fees.
- Parts and repairs.
- Fuel and oil.
- Transportation.
- Labor.
- Insurance (casualty, crop and hail).
- Harvesting
- Pasture or feeder cattle.
- Veterinarian fees.
Certain expenses are not qualified for this program. These include, but are not
limited to:
- Delinquent bills.
- Interest payments.
- Principal payments.
BND will not participate in an operating loan if the borrower has not paid in full
an operating loan under this program from the prior year.
Collateral - Loans under this program are generally secured by crops, livestock and
equipment liens. A pledge of FSA payments and assignment of crop insurance
will also be required, when available. Depending upon the circumstances
of a loan, additional security may be requested.
Depending upon the circumstances of a loan, additional security may be
requested.
Application Process
Application by a lead lender is required for BND's participation. See application for additional documentation required when submitting a request to BND. Lead lender is responsible for servicing the loan.
Interest Rate
The interest rate on BND's participation percentage shall be variable at 1%
below BND's base rate.
The interest rate charged by the local lender on its percentage may float with
BND's base rate but may not exceed BND's base rate by more than 3%.
Repayment Terms
The maturity date of an operating loan under this program may not exceed 1
year. No renewal or extension may be approved beyond the initial maturity
date of the loan except in the case of a livestock producer retaining ownership.
All advances are made and payments received on a pro rate basis.
Total Loan Amounts
There is no total loan limitation. BND's participated share is limited
to the lesser of $400,000 or 65% of the total loan amount.
Fees
There is no origination fee charged by BND.
For more information about this program or other Bank of North Dakota programs,
contact:
Bank of North Dakota
1200 Memorial Hwy
PO Box 5509
Bismarck, ND 58506-5509
(701) 328-5624
1-800-472-2166 ext. 5624
TDD (Telephone Device for the Deaf) 1-800-643-3916
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