MDA Rural Finance Authority Disaster Recovery Loan Program
At Christianson, we have been waiting to hear about disaster relief for our agriculture clients. We recently learned that the Minnesota Legislature authorized the use of the Rural Finance Authority’s (RFA) Disaster Recovery Loan Program funds to address the following additional needs during a Peacetime Emergency Declaration. You can apply for funds if your farm operation:
- Experienced a loss of revenue due to human disease (such as COVID-19)
- Experienced a loss of revenue due to highly contagious animal diseases affecting your livestock or poultry flocks.
This loan is available to help you cover lost revenue or expenses not covered by insurance. The funds can be used to help clean up, repair, or replace farm buildings, repair or replace septic and water systems, replace seed, fertilizer (or other cropping inputs), feed, or livestock and poultry.
Loan Eligibility Requirements
- You must be a Minnesota resident or a domestic family farm corporation or family farm partnership as defined in section 500.24, subd. 2;
- You must certify that the damage or loss was sustained within a county that was the subject of a state or federal disaster declaration, or due to the presence of a highly contagious animal disease, or due to an emergency determined by the RFA;
- You must certify that the farm operations experienced a quantifiable loss of revenue due to human disease resulting in a declaration of a peacetime emergency in the state;
- You must demonstrate an ability to repay the loan;
- At least 50 percent of average annual gross income must have been received from farming for the past three years.
The RFA participation in a qualifying loan is limited to 45 percent of the principal amount up to a maximum of $200,000. Interest rate on the RFA portion of the loan must not exceed 4.0 percent, and is currently set at 0.0 percent. Down payment and collateral requirements will be determined by the agricultural lender and the authority. Loan amortization will be scheduled on flexible terms not to exceed 10 years. Loan payments of interest only are permitted for the first two years. There is no maximum on the size of loan that a participating lender may make under the program.
The originating lender will retain the balance of each loan. The borrower must satisfy the local lender’s guidelines. The local lender will control the day-to- day operation of the loan. Participating lenders are allowed to charge a fixed or adjustable interest rate consistent with their normal lending practices and their agreement with the RFA. You can read all of the information here on the Minnesota Department of Agriculture website, or contact our experts for assistance throughout the MDA loan application process.