Are you thinking of retiring — truly retiring — and selling your farm? There are well-qualified young farmers in Delaware who are looking for farms to purchase.
Robert Garey, chair of the Aglands Foundation Board of Trustees, said there are at least four young farmers who have recently made application to the Young Farmer Loan Program, which is part of the Delaware Agricultural Lands (Aglands) Preservation Program. They’ve been approved for a 30-year, no-interest loan to purchase farmland in Delaware, Garey said.
“At our last board meeting,” Garey said, “I tried to direct attention to aged farmers with land but no one to carry on the farming tradition. A lot of those farmers don’t want anything to happen to their land after they’re gone. They want a young person with the same values to care for the land.
“Some farmers say, ‘Let me live here until the Lord calls me home,’” Garey continued.
Deputy Ag Secretary Austin Short, director of the program, said the Aglands Preservation program and the Young Farmers Program does not require that the owner live on the farm, so having someone else live in an existing house, such as the former owner, is permissible. Those details have to be worked out between buyer and seller.
One incentive for farmers concerned about what happens to their land is that farms in the program are placed into a permanent preservation easement after the sale.
The property must contain at least 15 tillable acres zoned for agricultural use, which must not be enrolled in a conservation easement at the time of purchase. However, it should already be in an Agricultural Preservation District.
A second incentive is that there is no realty transfer tax for land purchased through the Young Farmers Program.
To date, 35 young farmers have received $8 million in loans to purchase over 2,700 acres of land.
Applicants must be Delaware citizens between the ages of 18 and 40 with a net worth not exceeding $300,000, and must have at least three years of farming experience. Joint applications by spouses or siblings are allowed; however, all applicants must meet the criteria and their combined net worth cannot exceed $300,000. The applicant must not already own more than twice the amount of tillable acres that he/she wishes to purchase with this farm.
The loan is for up to 70 percent of the appraised value of the farm’s development rights, not to exceed $500,000. Most applicants need another (commercial) loan to purchase the farm. The Young Farmer loan typically provides approximately 50 percent of the purchase price. The primary lender can verify the applicant is credit worthy through their usual loan process – thus DDA staff does not have to analyze credit risk.
The commercial loan is the primary loan. It is repaid first and then the Young Farmer loan is repaid, at no interest. The applicant has 30 years to repay the Young Farmer loan.
At the time of application, the applicant submits a fully executed sales contract, a loan eligibility letter from a commercial lender (for the balance of the purchase price), and a farm (business) plan.
The Aglands Foundation Board only accepts loan applications when funding is available.
“We have money on hold, set aside for the Young Farmer Program,” said Garey, “so the buyer does not have to wait a year for the next round.”
Short said, “We are accepting applications on a continuous basis (as long as funding remains), so as soon as we receive a Young Farmer application then we can begin the process to make the loan and the applicant can purchase the farm. We provide the Young Farmer loan at the time of settlement.”
Sept. 30 is the deadline for the next round (Round 24) for the Aglands Preservation Program. Short noted that 110 farms were selected in Round 23. “We have $10 million in state funds and should receive funding from USDA NRCS as well as matching funds from the county governments,” he added.
For more information on the loan program, visit https://agriculture.delaware.gov/agland-preservation-planning/young-farmers-program/ or call Austin Short at DDA, (302) 698-4500.