If you find you meet the criteria of a beginning farmer, the first step in getting a loan is for you (the borrower) to locate a lender. This can be a bank, savings and loan, insurance company or other lending institution which will loan funds through this program. It can also be a private individual, including the current landowner, if certain requirements are met. When the borrower qualifies with the lender, a completed loan application  with $50 fee must be submitted to CADA.

After the application has been reviewed and approved by CADA, a closing date will be set. The following steps will then be followed:

• CADA issues a tax-exempt bond to the lender. A bank purchasing the bond should be aware, however, that interest received on the bond will probably have the effect of reducing the interest expense deduction that the bank may otherwise have available for income tax purposes.
• The lender's payment for the bond will pass through CADA to the borrower to fund his or her project.
• The borrower's payments on the loan are assigned by CADA to the lender, thereby becoming the payments on the bond.

Please Note: If you wish to obtain a loan from CADA, the loan must be approved by CADA no later than 60 days after any payment is made to acquire the project. If CADA's approval is not received within such 60 days, the loan is considered refinancing and is not eligible for tax-exempt financing.

FEES
Please keep in mind the following fees associated with obtaining a beginning farmer loan through this program:

1. A non-refundable $50 application fee payable to CADA.
2. Legal fees ranging from $750-$1,250 for drafting the necessary documents ($750 for loans of $100,000 or less; $1,000 for loans ranging from $100,001 to $200,000; and $1,250 for loans over $200,000).
3. A 1/4 of 1 percent closing fee (minimum of $100) which covers the costs CADA experiences in closing the loan (the application fee will be applied to CADA's closing fee); and,
4. An annual fee equal to 1/8 of 1 percent of the unpaid principal of the bond.
5. The lending institution may also charge usual and customary fees and points which are mutually agreed upon by the lender and borrower and are approved by CADA.