ILLINOIS

Chris Meister, Executive Director
Illinois Finance Authority
180 N Stetson Ave, Ste 2555
Chicago, IL 60601-6776
Telephone: (312) 651-1320
FAX: (312) 651-1350
E-mail: cmeister@il-fa.com

Lorrie Karcher, Program Administrator
Illinois Finance Authority
2929 Broadway St, Ste 7B
Mt. Vernon, IL 62864-2383
Telephone: (618) 244-2424
E-mail: lkarcher@il-fa.com
Website: www.il-fa.com/agriculture
Illinois Farm Development Authority Began: 1982
Illinois Finance Authority Began: 2004

Program/Project Title: Beginning Farmer Bond Program (Aggie Bond)
Program Began: 1982
Contact Person: Lorrie Karcher
Cost/Funding: Borrowers pay a closing fee of 1.5 percent. These federally tax exempt bonds are subject to the state’s bond cap. Maximum loan size is $470,100 for calendar year 2010.
Target Group: First time farmland buyers with a net worth of less than $500,000. Applicants are also subject to the federal restrictions concerning aggie bonds.
Description: A beginning farmer benefits by receiving an interest rate which is below market. Local lenders are able to offer the lower rate because the bonds are federally tax-exempt. Bonds can be used together with FSA’s down payment loan program. Bonds are also available for use with qualified contract for deed sales.

Program/Project Title: State Guarantee Program for Restructuring Ag Debt
Program Began: 1986
Contact Person: Lorrie Karcher
Target Group: Existing farm operations that need to restructure or refinance existing debt.
Description: The applicant pays a closing fee equal to 3/4 of 1 percent of the loan. Of this, 1/4 percent is paid to the lender and 1/2 percent is retained by IFA for operating expenses. The lender also pays a 1/4 percent administrative fee annually. A loss reserve fund has been established by the state. Maximum loan size is $500,000. Local lenders use this loan guarantee program to refinance and restructure an applicant’s existing debt. Debt held by one or more lenders is consolidated and guaranteed through this program. The lender receives a guarantee of 85 percent of the principal and interest. The guarantee provides credit enhancement, and provides more favorable terms including lower interest rates and smaller principal payments. Guarantees are backed by the full faith and credit of the state. They are exempt from banks’ legal lending limits.

Program/Project Title: Young Farmer Guarantee Program
Began: 1993
Contact Person: Lorrie Karcher
Cost/Funding: The applicant pays a closing fee equal to 1 percent of the loan. Of this, 1/4 percent is paid to the lender and 3/4 percent is retained by IFA for operating expenses. The lender also pays a 1/4 percent administrative fee annually. A loss reserve fund has been established by the state. Maximum loan size is $500,000.
Target Group: Young farmers who are purchasing capital assets.
Description: Applicants work with local lenders to arrange financing for such things as land, buildings, breeding livestock, machinery and equipment. The lender receives a guarantee of 85 percent of the principal and interest. The guarantee provides credit enhancement, resulting in more favorable terms and more financing opportunities for young farmers. Guarantees are backed by the full faith and credit of the state. They are exempt from banks’ legal lending limits.

Program/Project Title: Specialized Livestock Guarantee
Program Began: 1996
Contact Person: Lorrie Karcher
Target Group: Farmers who are acquiring, constructing or remodeling specialized livestock facilities, including but not limited to swine, dairy and beef operations.  May be contract or independent producers.
Description: The applicant pays a closing fee equal to 1 percent of the loan. Of this, 1/4 percent is paid to the lender and 3/4 percent is retained by IFA for operating expenses. The lender also pays a 1/4 percent administrative fee annually. A loss reserve fund has been established by the state. Maximum loan size is $1,000,000. Local lenders provide financing; IFA guarantees 85 percent of the principal and interest. Loans may be used for the construction, remodeling or acquisition of facilities and can also be used to finance related machinery, equipment and breeding livestock. The guarantee assists lenders in providing credit for specialized operations that may have highly improved real estate. It also allows the lender an opportunity to finance new types of relationships among producers, vendors and suppliers in various livestock industries. Guarantees are backed by the full faith and credit of the state. They are exempt from banks’ legal lending limits.

Program/Project Title: Value-Added Stock Purchase
Program Began: 2001
Contact Person: Lorrie Karcher
Cost/Funding: The application fee is $300. For loans above $30,000, there is a loan closing fee equal to 1 percent of the loan amount, minus the application fee paid. The lender pays a ¼ of 1 percent of the outstanding principal balance for the administrative fee annually. A loss reserve fund has been established by the state. The maximum loan size is $100,000.
Target Group: Farmers who are buying stock in value-added entities that further process Illinois farm commodities. Recent examples include ethanol plants and meat processing facilities.
Description: Local lenders provide financing; IFA guarantees 85 percent of the principal and interest. Stock in the value-added entity may be pledged as collateral to secure these loans. Additional collateral may be required. Loans are scheduled with a 10 year repayment with an “interest only” payment in the first year.

Program/Project Title: Agri-Industry Guarantee
Program Began: 1987
Contact Person: Lorrie Karcher
Cost/Funding: The applicant pays a loan closing fee of ¾ of 1 percent. The lender also pays a ¼ of 1 percent of the outstanding principal balance as the administrative fee annually. A loss reserve fund has been established by the state. Maximum loan size is $1 million, although some exceptions can be made and borrowers may add additional loans in future years.
Target Group: Entities that are processing or otherwise adding value to Illinois farm commodities. Also, farmers that are producing commodities not commonly produced in Illinois. Examples include poultry, fruit and vegetable production and processing, livestock processing and retail meat, viticulture, and wineries. Also, other agri-businesses located in Illinois. Examples include grain elevators, machinery and equipment, parts manufacturing related to the agricultural industry.
Description: Local lenders provide financing; IFA guarantees 85 percent of the principal and interest. Guarantees are backed by the full faith and credit of the state. They are exempt from banks’ legal lending limits.

Program/Project Title: Participation Loan Program
Contact Person: Lorrie Karcher
Cost/Funding: The applicant pays an application fee of $200. Maximum loan size is $500,000 or 50 percent of the project cost, whichever is less. The IFA funded portion of the loan is loaned at an interest rate of 1.00 percent less the then primary lender’s interest rate.  Interest rates may be fixed up to 5 years.
Target Group: Agricultural producers and agribusinesses are both eligible for the program. The agri-businesses or producer must be located in Illinois. Program is designed to finance and foster further expansion of farms and agri-businesses in the state of Illinois. Eligible projects are limited to new money transactions for the purchase of fixed assets.
Description: Local lenders act as the lead lender, with IFA participating in the funding by purchasing a portion of the loan from the originating lender. Initial term of IFA commitment is 5 years, with the option of one 5 year extension.  Loans may include a balloon with longer amortization when applicable. Collateral is shared with IFA on a “Parri Passu” basis.

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