Illinois Administrative Code › Title 74 - PUBLIC FINANCE › Part 1100 - ILLINOIS FINANCE AUTHORITY › Subpart G - FARM DEVELOPMENT PROGRAM › Section 1100.720 - Rules and Guidelines Applicable to the Young Farmer Guarantee Program

Current through Register Vol. 48, No. 28, July 12, 2024
a) General
				Description of Program. The Young Farmer Guarantee Program (YFG) is designed to
				enhance credit availability to younger farmers who are purchasing capital
				assets. Loan funds may be used for new purchases of capital assets such as
				land, buildings, machinery, equipment, breeding livestock, soil and water
				conservation projects, etc. In some cases, loan proceeds may be used to
				refinance existing debt as needed to improve lien positions or improve
				financial structure. The provisions of this Section are applicable only to the
				YFG.
b) Definitions
Words defined in the Illinois Finance Authority Act and in
				  Section
				  1100.50 have the same
				  meaning when used in this Subpart unless a more specific definition is
				  prescribed in this Section. This Section establishes additional definitions for
				  use in this Subpart only.
"Applicant" means a farmer whose application for a Young
				  Farmer Guarantee has been submitted to the Authority by a lender.
"Asset" includes, but is not limited to, the following:crops
				  or feed on hand; livestock held for sale; breeding stock; cash; marketable
				  bonds and securities; securities not readily marketable; accounts receivable;
				  notes receivable; cash invested in growing crops; net cash value of life
				  insurance; machinery and equipment; cars and trucks; farm and other real estate
				  including life estates and personal residence; value of beneficial interest in
				  trusts;governmentpayments or grants; capitalized leases; retirement accounts
				  and all other assets. [20 ILCS
				  3501/801-10(aa) ]
"Debt to Asset Ratio" means total outstanding liabilities,
				  including any debt to be financed or refinanced under this Section, divided by
				  total outstanding assets. [20 ILCS
				  3501/830-45(a) ]
"Fund" means the Illinois Farmer and Agribusiness Loan
				  Guarantee Fund (see
				  20
				  ILCS 3501/830-35(c) ), which is the
				  State's fund to cover losses resulting from defaults on young farmer guarantee
				  loans.
"Gross Annual Income" means income as defined in Section 61
				  of the Internal Revenue Code (
				  26 USC 61
				  ).
"Liability" includes, but is not limited to, the following:
				  accounts payable; notes or other indebtedness owed to any source; taxes; rent;
				  amounts owed on real estate contracts or real estate mortgages;
				  judgments;accruedinterest payable; indebtedness under capitalized leases; and
				  all anyother liabilities. [20 ILCS
				  3501/801-10(bb) ]
"YFG Loan" means an installment note for which the State of
				  Illinois shall be liable for 85% of the total principal and interest as
				  determined by the Authority.
"Young Farmer" means a resident of Illinois who is at
				  least18years of age, who is a principal operator of a farm or land, who derives
				  or will derive at least 50% of gross annual income from farming, who has a net
				  worth of not less than $10,000and whose debt to asset ratio is not less than
				  40%. [20 ILCS
				  3501/830-45(a) ]
c) Eligible Farmers. To qualify for
				participation in the YFG, each farmer must:
1) be at least18years of age and maintain his
				principal residence in the State [20 ILCS
				3501/830-45(a) ];
2) be the principal operator of a farm who
				derives or will derive at least 50% of annual gross income from farming
				[20 ILCS
				3501/830-45(a) ];
3) have a debt to asset ratio ofnot less
				than40% and not greater than 70% after purchase of the capital item and have a
				net worth of not less than $10,000 [20 ILCS
				3501/830-45(a) ];
4) demonstrate the ability to adequately
				service the proposed debt. If this ability is not adequately demonstrated, he
				can have a guarantor sign the note with him and/or pledge additional collateral
				for the loan;
5) provide sufficient
				collateral to secure the YFG loan and agree to keep it adequately
				collateralized in the future. All real estate and depreciable property which is
				to be used as collateral on a YFG loan must be evaluated by IFA staff or
				appraised by a qualified appraiser. All real estate appraisals must meet
				federal regulatory requirements and meet the Uniform Standards of Professional
				Appraisal Practice of the Appraisal Foundation. Auctioneers and machinery and
				equipment dealers are qualified to appraise depreciable property. The applicant
				is liable for all appraisal fees connected with the YFG Loan;
6) certify that all of his debts will be
				current at the time the YFG loan is closed. (See
				20 ILCS
				3501/830-45.)