ILLINOIS

Jill Rendleman
Illinois Finance Authority
427 East Monroe, Suite 202
Springfield, IL 62701
(217) 782-5792
FAX (217) 782-3989
www.il-fa.com
Organization Began: 1982

Beginning Farmer Bond Program (Aggie Bond)
1982

Borrowers pay a closing fee of 1.5 percent. These federally tax exempt bonds are subject to the state’s bond cap. Maximum loan size is $250,000.

First time farmland buyers with a net worth of less than $500,000. Applicants are also subject to the federal restrictions concerning aggie bonds.

A young farmer benefits by receiving an interest rate which is below market. Local lenders are able to offer the lower rate because the bonds are federally tax-exempt. Bonds can be used together with FSA’s down payment loan program. Bonds are also available for use with qualified contract for deed sales.

State Guarantee Program for Restructuring Ag Debt
1986

The applicant pays a closing fee equal to 3/4 of 1 percent of the loan. Of this, 1/4 percent is paid to the lender and 1/2 percent is retained by IFDA for operating expenses. The lender also pays a 1/4 percent administrative fee annually. A loss reserve fund has been established by the state. Maximum loan size is $500,000.

Existing farm operations that need to restructure or refinance existing debt.

Local lenders use this loan guarantee program to refinance and restructure an applicant’s existing debt. Debt held by one or more lenders is consolidated and guaranteed through this program. The lender receives a guarantee of 85 percent of the principal and interest. The guarantee provides credit enhancement, and provides more favorable terms including lower interest rates and smaller principal payments. Guarantees are backed by the full faith and credit of the state. They are exempt from banks’ legal lending limits.

Young Farmer Guarantee Program
Began: 1993

The applicant pays a closing fee equal to 1 percent of the loan. Of this, 1/4 percent is paid to the lender and 3/4 percent is retained by IFDA for operating expenses. The lender also pays a 1/4 percent administrative fee annually. A loss reserve fund has been established by the state. Maximum loan size is $500,000.

For young farmers who are purchasing capital assets.

Applicants work with local lenders to arrange financing for such things as land, buildings, breeding livestock, machinery and equipment. The lender receives a guarantee of 85 percent of the principal and interest. The guarantee provides credit enhancement, resulting in more favorable terms and more financing opportunities for young farmers. Guarantees are backed by the full faith and credit of the state. They are exempt from banks’ legal lending limits.

Specialized Livestock Guarantee
1996

For farmers who are acquiring, constructing or remodeling specialized livestock facilities, including but not limited to, swine, dairy and beef operations. May be contract or independent producers.
The applicant pays a closing fee equal of 1 percent of the loan. Of this, 1/4 percent is paid to the lender and 3/4 percent is retained by IFDA for operating expenses. The lender also pays a 1/4 percent administrative fee annually. A loss reserve fund has been established by the state. Maximum loan size is $1,000,000.
Local lenders provide financing; IFDA guarantees 85 percent of the principal and interest. Loans may be used for the construction, remodeling or acquisition of facilities and can also be used to finance related machinery, equipment and breeding livestock. The guarantee assists lenders in providing credit for specialized operations that may have highly improved real estate. Also allows the lender an opportunity to finance new types of relationships among producers, vendors and suppliers in various livestock industries. Guarantees are backed by the full faith and credit of the state. They are exempt from banks’ legal lending limits.

Value-Added Stock Purchase
2001

For farmers who are buying stock in value-added entities that further process Illinois farm commodities. Recent examples include ethanol plants and meat processing facilities.

The application fee is $300. For loans above $30,000, there is a loan closing fee equal to 1 percent of the loan amount, minus the application fee paid. The lender pays a _ percent administrative fee annually. A Loss Reserve Fund has been established by the State. The maximum loan size is $100,000.

Local lenders provide financing; IFDA guarantees 85 percent of the principal and interest. Stock in the value-added entity may be pledged as collateral to secure these loans. Additional collateral may be required. Loans are scheduled with a 10 year repayment with an “interest only” payment in the first year.

Agri-Industry Guarantee
1987

For entities that are processing or otherwise adding value to Illinois farm commodities. Also, farmers that are producing commodities not commonly produced in Illinois. Examples include poultry, fruit and vegetable production and processing, livestock processing and retail meat, viticulture, and wineries.

The applicant pays a loan closing fee of _ of 1 percent. The lender also pays a _ percent administrative fee annually. A Loss Reserve fund has been established by the State. Maximum loan size is $1 million, although some exceptions can be made and borrowers may add additional loans in future years.

Local lenders provide financing; IFDA guarantees 85 percent of the principal and interest. Guarantees are backed by the full faith and credit of the State. They are exempt from banks’ legal lending limits.

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