KAFC Agricultural Infrastructure Loan Program (AILP) (AILP)

The Agricultural Infrastructure Loan Program (AILP), offered by the Kentucky Agricultural Finance Corporation (KAFC), assists Kentucky agricultural producers by providing them access to below-market financing for the acquisition, renovation, and construction of agricultural structures that enhance the profitability of their farming operations.

For borrowers showing eligibility, maximum KAFC participation is $250,000 or 50% of the project, whichever is less. Household and/or operation may have multiple KAFC loans but is limited to an aggregate balance of $250,000 across all programs (excluding the Agriculture Processing Loan Program). The borrower must receive at least 20% of gross income from farming for the previous two years (evidenced by federal income tax returns), be a Kentucky resident, and the project must be located on property in Kentucky.

The participating lender must be a financial institution with offices in Kentucky, and the lead lender prepares and submits the loan application. The interest rate on the KAFC portion is fixed at 2% a.p.r. for the life of the loan (KAFC may adjust the rate on new loans as market conditions change). The lender services the loan for no more than 0.75% (75 basis points). Maximum KAFC loan term is 15 years or the useful life of the asset (loans secured by real estate may be amortized over 25 years with a 15-year balloon). There is no prepayment penalty. Construction projects must commence within six months of loan approval and be completed within eighteen months. Eligible projects include aquaculture, beef, dairy, equine, grain, poultry, swine, and tobacco facilities, plus tiling and water irrigation/pivot systems. Operating or refinancing loans are not eligible.

Apply through a participating Kentucky lender who prepares and submits the loan application to KAFC. For more information, contact Bill McCloskey at the Kentucky Office of Agricultural Policy, (502) 382-6093 or kafc@ky.gov.