UNITY, Maine – One of the country’s newest credit unions, Maine Harvest FCU, has announced a new program that will pay closing costs for purchasing or refinancing farmland in Maine.
According to the credit union, 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.
As CUToday.info reported, MHFCU was chartered by NCUA in 2019 to become the first-and-only financial institution focused on lending to small farmers and food producers.
“Closing costs on farm loans are high, and often make it financially difficult to refinance, even at lower rates,” said Scott Budde, CEO and cofounder of MHFCU, who added he is hopeful the grants will incent 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.”
According to Maine Harvest, the state 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% of farmers currently aged 34 or younger, the CU reported.
Increase in Number of Food Producers
“Maine’s local food economy is strengthening, with the number of food producers and female farmers both increasing between the 2012 and 2017 Census,” it added, noting the sectors poised for further growth are artisanal cheese, vegetables and local grains.
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, the credit union said.
Recommendations made during the assessments are only suggestions – farmers do not need to act on them to qualify for the grant.
“We are seeing increased interest in new farmland financing at these lower rates, which is a positive sign for the industry at-large,” said Patty Duffy, MHFCU’s chief lending officer.
A ‘Positive Trend’
Added Amanda Beal, Maine’s Commissioner of Agriculture, "COVID-19 has brought increased attention to the importance of Maine’s farms, with many people actively seeking to purchase items produced locally. We hope that this positive trend continues post-pandemic, and that Maine farmers can find a way to take advantage of this loan program.”