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Established Farmer Real Estate Loan Program
The Established Farmer Real Estate Loan Program assists the farmer and
rancher with agricultural real estate loans.
Qualifying Requirements
Borrower - An established farmer is any North Dakota resident owning real estate for agricultural purposes.
Use of Proceeds - The maximum amount available to any one borrower is $1,000,000. The
proceeds shall be used for agricultural purposes.
Information - BND will act upon a loan request when the following
information is received:
- A completed BND loan application with necessary documents.
- The borrower's three previous years financial statements.
- Copies of the borrower's three previous years tax returns.
- ASCS aerial photos of the subject property.
- A narrative explaining the loan request, farming experience and management ability of the borrower.
Additional information may be required depending upon the circumstances of
the loan and the borrower.
Collateral - BND may lend up to 65% of the appraised value of the real estate being
pledged as collateral. It will require a first mortgage on the property
that is being used as collateral. In addition, BND will require an assignment
of rents.
Application Process
An application for a loan is made directly to BND. An application should include sufficient information to allow BND to properly evaluate a loan request. In addition to the information outlined in the Information section above, BND will require:
- Hazard insurance on all buildings used as collateral naming BND as "loss payee".
- Current qualified appraisal of the real estate. The appraisal is used to demonstrate that the loan meets BND's collateral requirement. The cost of this appraisal is paid by the borrower. (This appraisal should not be ordered until requested by BND.)
BND will follow its normal loan review procedures in evaluating the loan. If an
application has been approved and a commitment given, a borrower may have
up to 90 days to draw the funds. If the funds have not been drawn upon within
the commitment period, BND will cancel the commitment without further notice
to the borrower.
Interest Rate
The interest rate is a market rate of interest and maybe fixed or variable.
Variable rate adjustments are limited to a 6% increase over the original rate
during the term of the loan.
Farm Real Estate Loan Rates Page
Repayment Terms
The term of a loan may not exceed 25 years. Annual amortized payments are
required. Prepayment penalties do not apply.
Fees
All costs incurred by BND in connection with a loan application and loan
closing must be paid by the borrower. Upon the acceptance of BND's commitment,
a non-refundable commitment fee is due prior to funding.
For more information about this program or other Bank of North Dakota programs,
contact:
Bank of North Dakota
1200 Memorial Hwy
PO Box 5509
Bismarck, ND 58506-5509
(701) 328-5624
1-800-472-2166 ext. 5624
TDD (Telephone Device for the Deaf) 1-800-643-3916
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