Disaster Recovery Loan Program

The Disaster Recovery Loan Program funds are available to farmers for expenses not covered by insurance, including replacement of flocks or livestock, building improvements, or to cover the loss of revenue. Eligible farmers work with their local lender to secure the loans from the RFA.

Eligibility for Disaster Recovery Loans is established through state or federal disaster declarations. For a current list of counties eligible for funding due to drought conditions and other severe weather events, see the USDA disaster designation information page. Applicants have one year from a disaster declaration date to apply for a loan.

The farmer candidate must meet the following criteria:

• Be a Minnesota resident, or a domestic family farm corporation or family farm partnership as defined in section 500.24, subd. 2.

• Certify that the damage or loss was sustained within a county that was the subject of a state or federal disaster declaration, or due to the presence of a highly contagious animal disease, or due to an emergency determined by the RFA; or certify that the farm operation experienced a quantifiable loss of revenue due to human disease resulting in a declaration of a peacetime emergency in the state.

• Demonstrate an ability to repay the loan.

• Have received at least 25% of annual gross income from farming for the past year.

Applicants have one year from a disaster declaration date to apply for a loan.

• This is a 55%/45% participation: the bank finances 55% of the loan and the RFA finances the remaining 45% at 0%.

• The RFA participation in a qualifying loan is limited to 45 percent of the principal amount, up to a maximum of $200,000. There is no maximum on the size of loan that a participating lender may make under the program.

• The interest rate on the RFA portion of the loan must not exceed 4.0 percent, and is currently set at 0.0 percent.

• 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.

• Down payment and collateral requirements are determined by the agricultural lender and the authority.

• The originating lender retains the balance of each loan; the borrower must satisfy the local lender's guidelines, and the local lender controls the day-to-day operation of the loan. Participating lenders may charge a fixed or adjustable interest rate consistent with their normal lending practices and their agreement with the RFA.

Work through your local lender to apply. Upon the farmer's completion of the Disaster Recovery Loan Participation Application, the lender applies for RFA participation; the RFA must have a completed Master Participation Agreement with the lender on file. All lending institutions are eligible to participate but do so voluntarily, and each lender must enter into an agreement with the RFA. Participating lenders can be searched by county on the MDA's List of Participating Lenders. Questions: RFA loan programs, 651-201-6004, RFA.Loans@state.mn.us.

• Rural Finance Authority (RFA) program hub

• List of RFA Loans

• List of Participating Lenders

• RFA Loan Brochure (PDF)

• Loan Comparison Chart

• Approved Farm Business Management Programs