Beginning Farmer Chattel Loan
The Beginning Farmer Chattel Loan program assists beginning ranchers with the purchase of equipment and livestock.
- Applicant must be a North Dakota resident who has not previously farmed for more than 15 years. The eligibility is determined by totaling the number of years the applicant has received federal farm program payments.
- Applicant’s net worth, including that of dependents and spouse, of less than $1,500,000
- Applicant’s principal occupation is or will be the production of an agricultural commodity.
Purchase equipment or livestock
The loan amount is a lifetime cap of $750,000 per borrower.
BND’s rate: Fixed at 1.00% below BND’s base rate for the first five years with a maximum interest rate of 6.00% per year. Rate is adjusted annually for the remaining two years at 1.00% below BND’s base rate.
Lender’s rate: The interest rate charged by the lead financial institution on its share of the loan may not exceed the BND base rate plus 2.00% on variable rate loans and 3.50% more than the corresponding Federal Home Loan Bank Advance Rate on fixed rate loans. Interest rate buydown funds, to the extent to which they are available, will be used to reduce the lead lender’s rate up to 4.00% subject to a minimum rate of 1.00% to the borrower.
BND uses its normal credit standards in reviewing the loan.
Collateral shall be first security interest on the chattels, not to exceed 80 percent of the agricultural collateral value.
The loan term may not exceed seven years. Annual amortized payments are required.
BND is required to take at least 50 percent, and not more than 80 percent, of the total loan. Borrower must work with a local lender to submit the loan application. Lead lender is responsible for servicing the loan.
If the borrower is in default under the loan agreements, the interest rate on the loan changes from the buydown rate to the original higher interest rate. The borrower shall accrue interest at the higher interest rate and all interest rate buydown funding is suspended until the loan is brought current.