Kansas Development Finance Authority Beginning Farmer Bond Program

KDFA offers this tax-exempt bond program authorized by the federal tax code. The program assists farmers who have not previously had, or who do not currently have, a substantial ownership interest in farmland to finance their agricultural businesses to start or keep farming. By making loans available at below-market interest rates through private lenders, the program can be used by beginning farmers for purchasing agricultural land, farm buildings, farm equipment, and breeding livestock. Beginning farmers may borrow up to $682,700 under the program limits, subject to lender approval (updated 1/15/26).

Basic Qualifications:

• May not have previously owned any substantial amount of farmland.

• Program may be used to purchase agricultural land, agricultural improvements, and depreciable agricultural property (new and used).

The loan maximums under existing federal law are:

• $682,700 lifetime aggregate cap (2026 figure, indexed annually for inflation) for agricultural land, agricultural improvements and depreciable agricultural property

• Of which no more than $62,500 may be for used property.

There is no minimum loan amount for the Program.

Beginning Farmer may not cash rent or custom hire a majority of the fieldwork or livestock management to be completed.

The Beginning Farmer must be an individual. Loans to corporations, partnerships, LLC's, etc. are not eligible under the Federal Tax Code.

This is not a grant and KDFA is not the lender. KDFA issues a tax-exempt bond so a private lender (or a contract seller) can lend to you at a below-market rate, because their interest income is exempt from federal and Kansas income tax. You still have to find and satisfy the lender.

How much you can borrow

• "beginning farmers may borrower up to $682,700 under the program limits, subject to lender approval" (kdfa.org, updated 1/15/26).

• Program Summary: "No more than a lifetime base aggregate amount per borrower of $682,700 as indexed for inflation, for Agricultural Land, Agricultural Improvements and Depreciable Agricultural Property." This is a lifetime cap, not a per-loan cap.

• "Of the possible $682,700, no more than $62,500 can be for 'used' property."

• "There is no minimum loan amount for the Program."

Rate and repayment

• The subsidy is the rate: "By making loans available at below-market interest rates through private lenders, KDFA assists farmers to become valuable assets for the state of Kansas." KDFA publishes no rate — "The Beginning Farmer and Bond Purchaser must agree on terms of the loan: interest rate (fixed or variable), length of loan, prepayment or call options, service fees and repayment schedule."

• Maturity limit: "the weighted average maturity of an Authority bond can be no more than 120% of the average reasonably expected economic life of the project being financed with proceeds of the Bond (except land)." No maximum for land.

Fees you will pay

• "a non-refundable $100 application fee (submitted with the Application)."

• "A bond closing fee equal to 1 1/2 % of the amount of the Bond, but not less than $500, must be paid by the Beginning Farmer or Bond Purchaser at closing."

• "The bond closing fee and other closing costs, up to 2% of the Bond amount, may be financed with bond proceeds."

• Bond counsel bills at closing and "the Beginning Farmer will be required to pay the Bond Counsel directly as a portion of the bond closing fee."

• Recording and filing fees are paid by you or the lender, not KDFA.

Ineligible uses: refinancing existing debt, working capital (feed, seed, fertilizer, fuel; feeder cattle/pigs/lambs), and the borrower must be an individual — "Loans to corporations, partnerships, LLC's, etc. are not eligible under the Federal Tax Code."

Application

These documents are links to Microsoft Word documents that will need to be downloaded to view:

• Beginning Farmer Brochure

• Beginning Farmer Program Summary

• KS Median Farm Size Table