175.12 - BEGINNING FARMER PROGRAM.
175.12 BEGINNING FARMER PROGRAM.
1. The authority shall develop a beginning farmer loan program to
facilitate the acquisition of agricultural land and improvements and
depreciable agricultural property by beginning farmers. The
authority shall exercise the powers granted to it in this chapter in
order to fulfill the goal of providing financial assistance to
beginning farmers in the acquisition of agricultural land and
agricultural improvements and depreciable agricultural property. The
authority may participate in and cooperate with programs of the
United States department of agriculture consolidated farm service
agency, federal land bank or any other agency or instrumentality of
the federal government or with any program of any other state agency
in the administration of the beginning farmer loan program and in the
making or purchasing of mortgage or secured loans pursuant to this
chapter.
2. The authority may participate in any federal programs designed
to assist beginning farmers or in any related federal or state
programs.
3. The authority shall provide in a beginning farmer loan program
that a mortgage or secured loan to or on behalf of a beginning farmer
shall be provided only if the following criteria are satisfied:
a. The beginning farmer is a resident of the state. If the
beginning farmer is a partnership, all partners shall be residents of
the state. If a beginning farmer is a family farm corporation, all
shareholders shall be residents of the state. If the beginning
farmer is a family farm limited liability company, all members shall
be residents of the state.
b. The agricultural land and agricultural improvements or
depreciable agricultural property the beginning farmer proposes to
purchase will be located in the state.
c. The beginning farmer has sufficient education, training,
or experience in the type of farming for which the beginning farmer
requests the mortgage or secured loan. If the beginning farmer is a
partnership, all partners shall have sufficient education, training,
or experience in the type of farming for which the beginning farmer
requests the mortgage or secured loan. If the beginning farmer is a
family farm corporation, all shareholders who are not minors shall
have sufficient education, training, or experience in the type of
farming for which the beginning farmer requests the mortgage or
secured loan. If the beginning farmer is a family farm limited
liability company, all members who are not minors shall have
sufficient education, training, or experience in the type of farming
for which the beginning farmer requests the mortgage or secured loan.
d. A loan to a beginning farmer for the acquisition of
agricultural land and agricultural improvements does not exceed five
hundred thousand dollars. A loan to a beginning farmer for the
acquisition of depreciable agricultural property does not exceed one
hundred twenty-five thousand dollars.
e. If the loan is for the acquisition of agricultural land,
the beginning farmer has or will have access to adequate working
capital, farm equipment, machinery or livestock. If the loan is for
the acquisition of depreciable agricultural property, the beginning
farmer has or will have access to adequate working capital or
agricultural land.
f. The beginning farmer shall materially and substantially
participate in farming. If the beginning farmer is a partnership,
family farm corporation, or family farm limited liability company,
each partner, shareholder, or member shall materially and
substantially participate in farming.
g. If the beginning farmer is an individual, the agricultural
land and agricultural improvements shall only be used for farming by
the individual, the individual's spouse, or the individual's minor
children. If the beginning farmer is a partnership, family farm
corporation, or family farm limited liability company, the
agricultural land and agricultural improvements shall only be used
for farming by any or all of the partners, shareholders, or members,
including their spouses and minor children.
h. The beginning farmer has not previously received financing
under the program for the acquisition of property similar in nature
to the property for which the loan is sought. However, this
restriction shall not apply if the amount previously received plus
the amount of the loan sought does not exceed five hundred thousand
dollars in the case of agricultural land and improvements or one
hundred twenty-five thousand dollars in the case of depreciable
agricultural property.
i. Other criteria as the authority prescribes by rule.
4. The authority may provide in a mortgage or secured loan made
or purchased pursuant to this chapter that the loan may not be
assumed or any interest in the agricultural land or improvements or
depreciable agricultural property may not be leased, sold or
otherwise conveyed without its prior written consent and may provide
a due-on-sale clause with respect to the occurrence of any of the
foregoing events without its prior written consent. The authority
may provide by rule the grounds for permitted assumptions of a
mortgage or for the leasing, sale or other conveyance of any interest
in the agricultural land or improvements. However, the authority
shall provide and state in a mortgage or secured loan that the
authority has the power to raise the interest rate of the loan to the
prevailing market rate if the mortgage or secured loan is assumed by
a farmer who is already established in that field at the time of the
assumption of the loan. This provision controls with respect to a
mortgage loan made or purchased pursuant to this chapter
notwithstanding the provisions of chapter 535.
5. The authority may participate in any interest in any mortgage
or secured loan made or purchased pursuant to this chapter with a
mortgage lender. The participation interest may be on a parity with
the interest in the mortgage or secured loan retained by the
authority, equally and ratably secured by the mortgage or securing
agreement securing the mortgage or secured loan. Section History: Early Form
[C81, § 175.12; 81 Acts, ch 68, § 3, 4] Section History: Recent Form
85 Acts, ch 15, §4, 5; 94 Acts, ch 1118, §4--7; 95 Acts, ch 216, §
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Referred to in § 159.18, 175.17, 175.34, 175.37