Farm Operating Loan Program
The North Dakota legislature established a loan program to assist with farm operating loans.
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Qualifying Requirements:
Borrower - A borrower is a "farmer" who is a resident of the North Dakota, owns or operates an existing farm or ranch, and who is at least eighteen (18) years old.
Net Worth - A maximum net worth requirement has not been established. However, legislative action requires that a borrower's debt-to-asset ratio must exceed 50%, or a net worth of less than $500,000.
Use of Proceeds - BND may participate in loans for the operation of an existing farm or ranch. Eligible expenses are for the current operating year only. The loan may not be used to make any interest or principal payment, or capital expenditures.
BND will not participate in an operating loan if the borrower has not paid in full an operating loan under this program from the prior year.
Total Loan Amounts
There is no total loan limitation. BND's participated share is limited to the lesser of $400,000 or 65% of the total loan amount.
Collateral
Loans under this program are generally secured by crops, livestock and equipment liens. A pledge of FSA payments and assignment of crop insurance also is required, when available. Depending upon the circumstances of a loan, additional security may be requested.
Interest Rate
The interest rate on BND's participation percentage shall be variable at 1% below BND's base rate.
The interest rate charged by the local lender on its percentage may float with BND's base rate but may not exceed BND's base rate by more than 3%.
Repayment Terms
The maturity date of an operating loan under this program may not exceed one year. No renewal or extension may be approved beyond the initial maturity date of the loan except in the case of a livestock producer retaining ownership. All advances are made and payments received on a pro rate basis.
Application Process
Application by a lead lender is required for BND's participation. See application for additional documentation required when submitting a request to BND. The lead lender is responsible for servicing the loan.
Fees
There is no origination fee charged by BND.
For more information please contact us at:
Bank of North Dakota
1200 Memorial Hwy
PO Box 5509
Bismarck, ND 58506-5509
(701) 328-5624
1-800-472-2166 ext. 5624
TDD (Telephone Device for the Deaf) 1-800-643-3916
