ST. PAUL, MN -- The Minnesota House of Representatives has approved legislation that will allocate funds for the Rural Finance Authority (RFA) loan program.
The RFA partners with agricultural lenders to provide low-cost financing to farmers on terms and conditions not otherwise available from other credit sources. The RFA portion of the loan is carried at a reduced interest rate to improve the cash flow of eligible farmers. RFA offer loans within the beginning farmer loan and seller assisted program, agricultural improvement program, debt restructuring program, and livestock expansion programs.
“It was important for us to act quickly to approve these funds as the current balance is at zero dollars,” said Rep. Brian Daniels, (R-Faribault). “Growing season is fast approaching.”
State authorization to sell bonds for the RFA program expired on December 31, 2016. This bill provides a new authorization and $35 million for bonds to allow financing of loan programs available in the RFA program. Participating lenders provide 55% of the financing for the loans, and the state provides the remainder. The loans are user financed, meaning the debt service is repaid by the borrower, not the taxpayers.
The bill will now head to the Senate for their consideration.