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Maine Harvest FCU announced a new program that will pay closing costs for purchasing or refinancing farmland in Maine. The Conservation Grant Program will enable potential borrowers to take advantage of historically low interest rates by reimbursing borrowers for their closing costs, up to $3,500 per loan.
“Closing costs on farm loans are high, and often make it financially difficult to refinance, even at lower rates,” says Scott Budde, CEO and Cofounder of Maine Harvest FCU. Budde hopes this grant will incentivize farmers looking to buy land, expand acreage or reduce monthly mortgage costs. “Our mission is to improve Maine’s local food system through responsible lending, ultimately strengthening the position of Maine’s hardworking small farms and food producers.”
By the numbers, Maine has 7,600 farms that produce $3.8 billion in sales annually and employ 24,000 individuals statewide. The agricultural sector is one of the largest bringing younger people to the state, with 40 percent of farmers currently age 34 or younger.
“COVID-19 has brought increased attention to the importance of Maine’s farms, with many people actively seeking to purchase items produced locally,” says Amanda Beal, Maine’s Commissioner of Agriculture. “We hope that this positive trend continues post-pandemic, and that Maine farmers can find a way to take advantage of this loan program.”
To qualify, borrowers will need to have a land analysis performed by the Maine Organic Farmers and Gardeners Association (MOFGA) using software developed by the Natural Resources Conservation Service (NRCS) of the US Department of Agriculture. The software is designed to evaluate conservation practices that could be implemented to improve soil, water and environmental quality. Recommendations made during the assessments are only suggestions. Farmers do not need to act on the recommendations to qualify for the grant. All farmers, both organic and non-organic, interested in buying or refinancing farmland in Maine are encouraged to apply.
“We are seeing increased interest in new farmland financing at these lower rates, which is a positive sign for the industry at-large,” says Patty Duffy, Maine Harvest FCU’s Chief Lending Officer.