Cover photo for Illinois Finance Authority Beginning Farmer Bond Program

Illinois Finance Authority Beginning Farmer Bond Program

Illinois Financial Authority

The purpose of the First-Time Farmer Bond Program is to provide affordable financing to new, low net worth farmers for financing capital purchases. IFA works with the borrower's local lender to provide this financing. IFA issues a tax-exempt bond for the amount and with the terms of the loan. Because the interest income to the lender is exempt from federal income tax, the lender is able to charge a lower rate to the borrower. The loan and the bond are secured solely by the collateral required by the lender and are not obligations of IFA or of the State of Illinois. Because the lender assumes all credit risk, the lender makes all credit decisions. Loans may be used to acquire agricultural land, new depreciable property, or used depreciable property in conjunction with agricultural land.


  • The applicant must have net worth of not more than $500,000 at the time of application. Net worth is defined as total assets less total liabilities of the individual and the individual's spouse and minor children, if any. Residency.

  • The applicant must be a permanent resident of Illinois when the bond is issued. Age.

  • The applicant must be at least eighteen (18) years of age when the IFA loan application is submitted.

  • The applicant must be an individual. IFA cannot loan money to corporations, partnerships, trusts, or any other legal entity under the First-Time Farmer Program.

  • The applicant may be required to document to the satisfaction of the Lender and IFA that he will have access to adequate working capital, farm equipment, and livestock, if appropriate.

  • The applicant must not have had any prior direct or indirect ownership interest in a substantial amount of land. A substantial amount of land is a parcel that exceeds 30% of the median farm size in the county in which the land is located or a value of $125,000 or less.


Loan proceeds may be used for the following capital purchases only:

  • Agricultural Land. Land located in the State of Illinois that is suitable for use in farming and which is or will be operated as a farm.

  • Agricultural Improvements: Any improvements, buildings, structures or fixtures suitable for use in farming which are located on Agricultural Land. IFA will finance the purchase of new improvements on Agricultural Land. IFA can finance used Agricultural Improvements only in situations in which: the improvements are purchased in conjunction with Agricultural Land and used in the operation of a farm to be operated on the Agricultural Land being purchased; or a sufficient amount of qualified rehabilitation expenditures are incurred by the Borrower with respect to the Agricultural Improvements within two years from the date of issue of the Bond.

  • Depreciable Agricultural Property. Personal property suitable for use in farming for which an income tax deduction for depreciation is allowable in computing federal income tax under the Internal Revenue Code of 1954, as amended. Examples include, but are not limited to, farm machinery and trucks. Feeder livestock, seed, feed, fertilizer, and other types of inventory or supplies do not qualify as Depreciable Agricultural Property. IFA will finance the purchase of any new Depreciable Agricultural Property. IFA can also finance used Depreciable Agricultural Property if it is purchased in conjunction with Agricultural Land and used in the operation of a farm to be operated on the Agricultural Land being purchased. The total loan proceeds allocated to the purchase price of used equipment may not exceed $62,500.

  • No portion of the loan proceeds may be used for the purchase of a residence. If the project includes a residence, the applicant must make a down payment or obtain conventional financing for the value of the residence.zz

Application Instructions


Financial Instrument


Maximum Award Amount


Updated April 13, 2024

Image Credit: Dan Meyers

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