Cover photo for Texas Young Farmer Interest Rate Reduction Program

Texas Young Farmer Interest Rate Reduction Program

Texas Agricultural Finance Authority,
Texas Department of Agriculture

The Young Farmer Interest Rate Reduction (YFIRR) Program is intended to facilitate a lower interest rate to agricultural producers or agribusiness owners who are between 18 and 46 years of age through a commercial lender. The YFIRR program provides an interest reduction to the borrower on a qualifying bank loan for an eligible project. The Comptroller of Public Accounts for the State of Texas deposits funds in a bank (which must be a state approved depository) at a below market interest rate. The bank issues a loan of like amount, at no more than 4% above the interest rate on the state's deposit. The program does not offer a guaranty or participation by the Authority in the loan. 


  • Any person who is 18 years of age but younger than 46 years who proposes to use loan proceeds for the creation or expansion of an agricultural business in Texas.

  • The applicant should discuss the program with his or her lender and have the lender submit the application.

  • Eligible lenders include any financial institution that makes commercial loans and is an approved depository for state funds.

  • Farm Credit System lenders are not eligible because they are not able to accept deposits form the Comptroller of Public Accounts.

  • The lender and the borrower determine the repayment, maturity and collateral for the loan.  


Use of Funds:

Loan proceeds may be used for any agriculture-related operating expense, including:

  • The purchase or lease of land;

  • Fixed asset acquisition or improvement; and/or

  • Any enterprise based on agriculture, as identified in the application.

  • A loan under this program may be applied to existing debt only when required by the lender to finance the expansion of an eligible project. 

Interest Rate Determination: The Comptroller of Public Accounts places a linked deposit with a participating financial institution. The interest rate on the linked deposit is determined on the date the loan is funded and based on matching the loan maturity date to the closest U.S. Treasury bill or note maturity date or the end of the State’s fiscal biennium (Aug. 31 of each odd numbered year). Typically, YFIRR loans offer interest rates lower than current market rates.

Term Requirements: The lender and the borrower determine repayment, maturity and collateral for the loan.

Application Instructions


Financial Instrument

Discount, Loan

Maximum Award Amount


Updated March 22, 2024

Image Credit: Jed Owen

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