Q: Interest rate and fees

Interest rate : The guarantee fee may be included in the loan or in the rate charged by the lender. The lender may charge an interest rate not to exceed BND’s base interest rate plus 2.00% on variable rate loans and 3.50% over the corresponding Federal Home Loan Advance Rate on fixed rate loans. Fees : The fee is 0.50% per year or a one-time fee of 1.50% of the guaranteed portion. The guarantee fee may be included in the loan or in the rate charged by the lender.

Question 1

How to apply

Accepted Answer

BND offers this loan by partnering with local lenders. To apply, contact your lender.

If you have any questions, contact us or call (701) 328-5795.

Question 2

Forms

Accepted Answer

Bank Participation Loan Application (PDF)
Loan Guarantee Lender Payment History (PDF)
Loan Renewal Application for Existing Participations (PDF)

If you are not able to access a PDF, please contact us for assistance.

Question 3

Description

Accepted Answer

This loan assists farmers with purchasing or restructuring agricultural real estate loans by providing a financial institution with a 75% guarantee of total loans that do not exceed $400,000 to an individual borrower.

Question 4

Eligibility

Accepted Answer

The borrower must be a North Dakota resident.

Question 5

Use of proceeds

Accepted Answer

Proceeds may be used to guarantee a loan made by the lead lender to a farmer or rancher. The land must be located in North Dakota.

Question 6

Loan amount/limit

Accepted Answer

BND may guarantee up to 75% of the amount of principal due to the lender. The total of agricultural real estate loans to be guaranteed may not exceed $400,000 to an individual borrower. BND may approve a guarantee on a loan up to 80% of the certified appraised value of the agricultural real estate.

If used in conjunction with other BND programs, BND may have no more than $8,000,000 in outstanding loan guarantees under the farm real estate loan guarantee program.

Question 7

Interest rate and fees

Accepted Answer

Interest rate:

The guarantee fee may be included in the loan or in the rate charged by the lender. The lender may charge an interest rate not to exceed BND’s base interest rate plus 2.00% on variable rate loans and 3.50% over the corresponding Federal Home Loan Advance Rate on fixed rate loans.

Fees:

The fee is 0.50% per year or a one-time fee of 1.50% of the guaranteed portion. The guarantee fee may be included in the loan or in the rate charged by the lender.

Question 8

Lending criteria

Accepted Answer

BND uses its normal credit standards in reviewing the loan.

Question 9

Collateral

Accepted Answer

First mortgage on farm real estate located in North Dakota: 80% of appraised value.

Question 10

Additional requirements

Accepted Answer

The lead lender is responsible for submitting a Loan Guarantee Lender Payment History Form (PDF) to BND annually.

Question 11

Participation requirements

Accepted Answer

Borrower must work with a local lender to submit the loan application. Lead lender is responsible for servicing the loan.

Question 12

Guarantee terms

Accepted Answer

The guarantee term may not exceed five years.

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Bank of North Dakota