Series I Farm Real Estate Loans

The North Carolina Agricultural Finance Authority (NCAFA), created in 1986 to provide affordable credit to North Carolina farmers and agri-businesses unable to obtain credit from local sources at reasonable rates and terms, offers Series I Farm Real Estate loans. Loan purposes may include buying, improving, or enlarging farms; construction, improvement, or repair of farm homes and service buildings; improvement of on-farm water supplies; installation of pollution control; soil and water conservation measures, irrigation systems, and drainage improvements; refinancing debts; and providing for production of fish under controlled conditions.

Individuals, farming corporations, partnerships, or joint operations that have sufficient education, training, or experience to manage and operate a farm; are U.S. citizens or legal resident aliens maintaining a farming operation in North Carolina; have the legal capacity to incur the loan obligations; are unable to obtain credit elsewhere without an FSA guarantee; have an acceptable credit history; and will be the owner-operator of a family farm after the loan is closed.

A guaranteed real-estate loan, fully priced on the NCAFA page.

Rate and term: "NCAFA's Series I Farm Real Estate loans are made at prime plus 1.75%. The rate is variable and may change quarterly. The terms for repayment may be for periods up to 15 years." Loans are secured by liens on the real estate.

Loan limit: "NCAFA's Series I Farm Real Estate loans can be made up to $2,037,000.00 (amount varies annually based on Farm Service Agency guarantee limits)." No minimum loan size is published.

Fees and closing costs: "A $150 application fee is required when the application is submitted. At closing, a fee of 1/8th of 1% of the loan amount is required." NCAFA absorbs most processing costs: it "will cover all loan processing costs, including the FSA Guarantee fee of one and a half percent (1.5%) of 90% of the principal amount of the loan, appraisal cost and docket preparation and not pass these costs on to the borrower," and "NCAFA does not charge an origination fee." The borrower still pays closing costs, "which may include attorney fees, title insurance premiums, recording fees and hazard insurance."

No cost-share percentage or match is involved — this is credit, not a grant. Eligibility turns on being unable to obtain credit elsewhere without an FSA guarantee, and on being the owner-operator of a family farm after closing.

Apply through the NCAFA. A $150 application fee is required at submission; at closing a fee of 1/8th of 1% of the loan amount is required. NCAFA covers all loan processing costs, including the FSA guarantee fee (1.5% of 90% of principal), appraisal, and docket preparation, and does not charge an origination fee. Terms: prime plus 1.75% (variable, may change quarterly), for periods up to 15 years, secured by liens on the real estate. Loan limit: up to $2,037,000.00 (amount varies annually based on Farm Service Agency guarantee limits).