The North Texas Real Estate Blog
Grants and Loans for Texas Farmers and Ranchers: Part 1 IRR
Grants and Loans for Texas Farmers and Ranchers
The Interest Rate Reduction Program
Texas Farm and Ranch property owners can find many economic incentives on the federal and state level. Let’s look at just one program that can help reduce interest rates on loans for Texas Farmers and Ranchers.
The Texas Agricultural Finance Authority oversees The Interest Rate Reduction Program (IRR). The Texas legislature created TAFA in 1987. Its mission is designed to, “provide financial assistance for the expansion, development and diversification of production, processing, marketing and exporting of Texas agricultural products.”
So how can the IRR program help farm and ranch owners? Let’s look at the details of the program. Then let’s understand how it relates to real estate in North Texas.
Details of IRR and Eligibility
Overall, the point of this program is to reduce the interest rate on loans for Texas farmers and ranchers. The IRR does this by offering capital to qualified commercial lenders for loans. That lender can then pass on interest rate deductions to you for loans. In plain language, the IRR gives money to your lender, and they reduce your interest rate.
Total funding for this program totals 30 million dollars to date.
Any person who proposes to use loan proceeds for the creation or expansion of an agricultural business in Texas are eligible. That could mean you if you are running an agricultural business of some sort on your ranch or farm.
What can the loan proceeds be used for?
Loan proceeds can be used in different ways. These include the purchase or lease of land. So, if you are planning on purchasing a farm or ranch you should mention this program to your lender. The lender itself will apply to TAFA for the interest rate deduction after you fill out an application form.
The funds could also apply to a reduction of the interest rate on a loan to aquire new land near a property you already own. But remember, this program’s intent is to promote agricultural business. You can’t use this program simply to speculate on property or for property that won’t be used for an agricultural business.
However, there is no minimum size of the agricultural business to qualify. So a small cattle producer, a small equine operation or a small farmer could all qualify. In fact, it’s more geared towards small and medium sized interests. Why? Because the maximum loan amount is $500,000 to qualify.
Helpful Links to Material about IRR
Here is a link to the application form for the IRR from the Texas Department of Agriculture’s website.
Here is an overview of the program from TAFA. It provides even more detail on the program.
Texas First Realty hopes this article will help you. Keep in mind this article is for informational purposes only. We attempt to highlight useful grants and loans for Texas farmers and ranchers. Our mission as real estate agents will always include trying to educate clients and customers. Contact us if we can help you sell or buy a farm or ranch in North Texas.