Loan Participation Program
The LPP was established in 1996 to assist low income farmers secure loans and make down payments. IADA’s participation can be used to supplement the borrower’s down payment, thereby helping a farmer secure a loan more readily. The lender’s risk is also reduced since the IADA provides a “last-in/last-out” loan participation for the financial institution.
Several banks have inquired as to using both the IADA participation loan and the FSA 5/45/50 beginning farmer loan program. Previously this was not possible as the IADA participation loan had a maximum 20 year amortization, while the FSA loan required a 30 year amortization on any companion financing. The IADA board has approved a 30 year amortization on IADA participation loans only when the FSA program is also utilized.
Important Adjustments to the Loan Participation Program
Effective January 1, 2013
- Maximum Net Worth will INCREASE from $300,000 to $400,000
- The interest rate is being reduced to match the lowered BFLP rate proposed by the financial institution, or if the participation is done without a BFLP project, the interest rate will be a fixed 3.50%
- Previously, a bank needed to provide a bridge loan until the IADA funds were received to purchase IADA’s portion of the participation; with the assistance of the Iowa Treasurer’s Office, the bank will be able to receive IADA’s participation funds the same day as the closing – no bridge loan will be needed.
LPP Program Summary
The Program Summary will be able to answer almost any question you have about the Loan Participation Program.
BFLP & LPP Request to Adjust Loan Terms or Conditions
If for any reason during the life of the loan you need to change the loan terms, this form will need to be completed and returned to our office with the $100 processing fee.
Please direct Loan Participation Program questions to:
| Steve Ferguson Executive Director 515-281-6444 steve.ferguson@iowa.gov |