Beginning Farmer Loan Program

CADA loan program is known as the Beginning Farmer Program. The program involves a three-way transaction among the lender, the borrower and CADA. Through the issuance of a tax-exempt bond by CADA to the lender, all interest paid by the borrower is tax-exempt. The result is an interest rate to the borrower below commercial rates.

Process

Find a Lender. The first step in getting a loan is to locate a lender. This can be a bank, savings and loan, insurance company or other lending institution which will loan funds through this program. It can also be a private individual, including the current landowner, if certain requirements are met.

Fees

There are certain fees associated with obtaining a beginning farmer loan through this program. These fees include:

Application Fee

A non-refundable $50 application fee payable to CADA.

Legal Fees

Ranging from $750-$1,250 for drafting the necessary document ($750 for loans of $100,000 or less; $1,000 for loans ranging from $100,001 to $200,000; and $1,250 for loans over $200,000. Larger loans may have higher fees).

Closing Fee

Of 1/4 of 1 percent (minimum of $100) which covers the costs CADA experiences in closing the loan (the application fee will be applied to CADA’s closing fee); and,

Annual Fee

Equal to 1/8 of 1 percent of the unpaid principal of the bond. The lending institution may also charge usual and customary fees and points which are mutually agreed upon by the lender and borrower and are approved by CADA.

NOTE: this loan can be used in conjunction with the Farm Service Agency (FSA) Beginning Farmer Program. Please refer to FSA guidelines for qualifications.