Montana Beginning Farmer/Rancher Loan Program (BFRLP)

The Montana Beginning Farmer/Rancher Loan Program is a tax-exempt bond program designed to assist beginning farmers and ranchers in Montana to acquire agricultural property at lower interest rates. Lenders, individuals, partnerships, corporations, and other entities (the "Bond Purchaser") receive federally tax-exempt interest on a loan or contract sale made to a qualified beginning farmer/rancher; the Montana Agriculture Loan Authority issues a federally tax-exempt Private Activity Bond in the amount of the loan. Funds may be used to purchase agricultural land, agricultural improvements, and depreciable agricultural property.

The applicant must be a first-time farmer/rancher (no prior direct or indirect ownership interest in a substantial amount of farm/ranch land — a spouse's or minor child's interest is attributed to the applicant), at least age 18 (no upper age limit), a Montana resident at the time the bond is issued, with a net worth not exceeding $450,000, and documented training and experience in the type of operation for which the bond is requested. The land, improvements, and depreciable property may only be used for farming/ranching by the applicant, spouse, or minor children.

Loan maximums under existing federal law: $477,000 aggregate for agricultural land, improvements, and depreciable property; of the $450,000 lifetime bond total per individual, no more than $125,000 may be for new depreciable agricultural property, of which no more than $62,500 may be for "used" depreciable property. There is no minimum loan amount. Bonds are limited-obligation (non-recourse) obligations of the Authority, not indebtedness of the State of Montana. Program authorized under MCA 80-12-101 through 314; the Authority's powers are exercised by the Montana Department of Agriculture. Ineligible uses include refinancing existing debt, working capital, and land entirely enrolled in CRP.

There is no formal or defined application period — the program is ongoing and an application may be submitted at any time. A loan is funded solely from the bond sold to a Bond Purchaser (bank, contract seller, or individual investor); the applicant must arrange the loan with a Bond Purchaser who will purchase the Authority's bond. The Authority has no independent funds to lend and does not evaluate creditworthiness.