Farm Financing Options Partnered with MARBIDCO

What is MARBIDCO?

The Maryland Agricultural & Resource-Based Industry Development Corporation (MARBIDCO) is a quasi-public economic development organization chartered by the State of Maryland. Their mission is to help Maryland's farm, forestry, and seafood businesses succeed through financial partnership and other services.

What MARBIDCO offers

• Loan and grant programs for farmers, watermen, and rural business owners
• Land preservation programs to assist landowners in securing and protecting rural lands
• Partnerships with commercial lenders (like Farm Credit!) to maximize rural lending opportunities
• Business resources and planning tools for rural entrepreneurs

How does Farm Credit work with MARBIDCO?

Farm Credit can lend up to 80 percent of the appraised value or the purchase price, whichever is less, which equates to a 20 percent down payment. We understand this can be a challenge, especially for those that are young, small and/or beginning farmers. For our Maryland farmers, MARBIDCO is a resource we can turn to in order to help bridge that gap.

Here are some first steps:

1. Research MARBIDCO and the programs they offer:
   • Land preservation option – Rural Land Preservation Facilitation and Next Gen Programs | MARBIDCO
   • Loan options – Agricultural & Rural-Business Industry Loan Programs | MARBIDCO
2. Reach out to Farm Credit and one of our loan officers can help facilitate a call with the MARBIDCO staff, which will include checking the farm business and/or property’s eligibility
3. Proceed to application process

Ready to apply?

1. Prepare a robust farm business plan (Not sure where to start? Click here.)
2. Apply with Farm Credit (items to include: loan application, financials and business plan)
   Loans are evaluated for:

• Repayment: Ability to pay any debts (farm and personal) with income being generated
• Liquidity: Available cash on hand to service any debt payments within the next 12 months
• Equity: Looking at your ratio of assets to debt
• Credit: Pull credit report and evaluate history. Looking for no late pays, bankruptcies, tax liens
• Collateral: Evaluating value of the property to be purchased via appraisal

3. Once approved with Farm Credit, complete the MARBIDCO application process with assistance from your Farm Credit loan officer

What’s next?

The process of applying with Farm Credit and then MARBIDCO can take up to six months to complete. Be sure to inform all parties (sellers, real estate agents, attorneys) involved from the very beginning that you plan to work with both Farm Credit and MARBIDCO, to ensure this process goes as quickly and as smoothly as possible.

How does this partnership work?

Here’s an example scenario:

You are interested in purchasing a 100 acre farm. The proposed purchase price is $1,000,000. You have strong credit and a good income history. You know from your prior conversations with Farm Credit we require a 20 percent down payment. Your loan officer recommends two potential options for you to consider with MARBIDCO assistance:

Option 1: MARBIDCO Next Gen grant

• Utilize the farmland conservation easement option purchase program to help preserve the subject property from future development; this is an easement option purchase, which will limit land usage in the future
• MARBIDCO will pay up to 51 percent of the Fair Market Value (FMV) of the land only (with a cap of $500,000)
• Those interested in applying to the Next Gen program are requested to make contact with the county farmland preservation program office to determine eligibility of the property. (Not sure who to ask? Your loan officer can help you contact your local office.)
• Closing Transaction Fee: $2,500 (Next Gen only)

                       $1,000,000         (purchase price)

                       -$200,000            (MARBIDCO Next Gen grant)

                       $800,000             (Farm Credit loan amount)

Option 2: MARBIDCO Maryland Resource-Based Industry Financing Fund (MRBIFF)

• Can lend between 20-40 percent of financing needed, but MARBIDCO’s financing must be no greater than Farm Credit’s loan amount
• Current MARBIDCO interest rate*: 3.75% for first three years, 4.50% for the next three, and 5.75% for remaining life of loan
• Will typically have a balloon at ten years and require you refinance remaining balance
• Loan Origination: 1% of MARBIDCO loan amount (MRBIFF only)

                       $1,000,000 (purchase price)

                       -$350,000   (MARBIDCO loan amount)

                       -$50,000     (your cash down payment)

                       $600,000    (Farm Credit loan amount)

Are you searching for beginning farmer resources? Check out our beginning farmer page or our agriculture loans page. If you need help understanding how MARBIDCO and Farm Credit can work together to maximize your options, give us a call at 888.339.3334. We're here to help!

*As of January 31, 2023.