SD bridge loans can help with ag land purchases
SIOUX FALLS (AP) — South Dakota Agriculture Secretary Lucas Lentsch says a new state bridge loan program can help farmers and ranchers continue with an agricultural real estate purchase when Farm Service Agency funds may not be readily available.
Lentsch says the loan is structured for monthly interest only payments until the funding is available at FSA and the FSA loan is closed. The bridge loan is expected to be paid off by FSA within three to nine months.
The current interest rate is 4 percent and borrowers are required to pay closing fees. The state has the ability to extend the term for up to two years.
USDA state executive director Craig Schaunaman says the program is helpful as federal budget limitations could cause a gap between loan approval and funding.