Agriculture

Tax-Exempt Financing

IFA has authorization to issue first-time farmer bonds for individual farmers (and ranchers) to fund their first acquisition of farmland anywhere in Illinois.  The individual acquiring the farmland must be the principal user of the land and must participate in the operation of the farm, among other rules under federal tax law. 

Interest on tax‑exempt financing is generally well below the rates charged in traditional bank financing.  Because interest paid to banks on tax-exempt qualified private activity bonds (such as first-time farmer bonds) is not includable in their gross income for federal income tax purposes, banks are willing to accept a lower interest rate than they would accept if the interest was taxable.

First-time farmers that utilize IFA are afforded the opportunity to work with banks of their own choosing. 

Tax-exempt financing for first-time farmers, when paired with programs offered by the USDA Farm Service Agency, allows financing of up to 100% of all costs for new and used farm equipment, land and other depreciable property.  Contact Lorrie Karcher (lkarcher@il-fa.com) to discuss tax-exempt financing for first-time farmers.  Application forms are available for download at the link posted below.

* * Please note that the 2024 First-Time Farmer Bond limit is $649,400 * *