Oregon Aggie Bond Program

The purpose of the Beginning and Expanding Farmer Loan Program (aka Aggie Bond Program) is to provide affordable financing to new farmers for financing capital purchases.

The Aggie Bond Program allows the lender to avoid paying income taxes on interest the lender receives from the borrower. The lender passes on this savings to the borrower in the form of a lower interest rate. The state of Oregon does not provide a repayment guarantee of the Aggie Bond. The lender assumes all credit risks, and the borrower is solely responsible for repaying the Aggie Bond.

A person must:

• Be an Oregon resident

• Have a net worth of no more than $750,000

• Be a principal user of the farm and materially and substantially participate on the farm

• Have never owned/operated a farm that was larger than 30% of the county's median farm size

The maximum Aggie Bond financing is $520,000. Aggie Bond financing can be used for:

• Purchase of farm land

• Costs of depreciable farm property. Financing of new depreciable property (such as construction of farm buildings and new equipment) is limited to $250,000. Financing of used depreciable farm property is limited to $62,500.

Most entities that are in the business of making agricultural loans (such as commercial banks and Northwest Farm Credit Services) are eligible to be Aggie Bond lenders. A lender may not be a substantial user of the financed property, or related to a substantial user of that property. The Aggie Bond Program has some unique features, and works most easily with eligible lenders who have reviewed the program requirements and expressed an interest in participating.

Interested farmers should find an eligible lender willing to provide financing, then apply to Business Oregon using this application.

The application cannot be reviewed unless the department has received all of the following:

• $250 application fee

• Background letter from applicant and lender

• Current personal financial statement witnessed by a bank officer and signed by all loan applicants

• Complete application form signed by both parties

• All required Certifications and Certificates

Lenders with questions about issuance fees and project structures should contact Business Oregon.

• Program flier 

• Application

• Fiscal Yr 2016-2020

• OAR 123-052