Farmers whose operations may be suffering from damage caused by storm are now eligible for compensation with zero-interest loans made available after the state declared an emergency after recent severe weather.
The Minnesota Department of Agriculture’s (MDA) Rural Finance Authority (RFA) Board declared the emergency May 31 for the following counties: Aitkin, Becker, Beltrami, Benton, Big Stone, Brown, Carlton, Chippewa, Chisago, Clay, Clearwater, Cook, Cottonwood, Douglas, Faribault, Grant, Isanti, Jackson, Kanabec, Kandiyohi, Kittson, Koochiching, Lac Qui Parle, Lake, Lake of the Woods, Lincoln, Lyon, Mahnomen, Marshall, Meeker, Morrison, Murray, Nobles, Norman, Otter Tail, Pennington, Pine, Pipestone, Polk, Pope, Red Lake, Renville, Rock, Roseau, Saint Louis, Sherburne, Stearns, Steele, Stevens, Swift, Todd, Traverse, Wadena, Wilkin and Yellow Medicine.
The Disaster Recovery Loan Program can be used to help cover lost revenue or expenses not covered by insurance. The funds can be used to help clean up, repair, or replace farm structures and replace livestock.
The declaration applies to physical property damage and/or death of livestock taking place due to heavy rains and high winds during May.
Eligible farmers must have received at least 50% of their annual gross income from farming for the past three years and will work through their bank to secure the loans from the RFA. Interest rates on the RFA portion of the loan are currently set at 0.0%.
The Minnesota Legislature this spring appropriated $2.5 million in additional funds to replenish the revolving loan account that funds the Disaster Recover Loan program, which has recently been used for highly pathogenic avian influenza poultry losses, drought, and COVID-19 expenses.
The RFA participation in a qualifying loan is limited to 45% of the principal amount up to $200,000. Down payment and collateral requirements will be determined by the ag lender and and 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 the loan a participating lender may make under the program.
The originating lender will retain the balance of each loan. The borrower must satisfy local lenders’ 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.
For more information on the Disaster Recovery Loan visit mda.state.mn.us/disasterloan or call the Rural Finance Authority Office loan programs at 651-201-6004.