Value-Added Stock Loan Participation Program
Administered by Rural Finance Authority
If you're a Minnesota farmer interested in investing in cooperative stock for value-added agricultural products—including wind energy or anaerobic digestion operations—this participation loan can help you finance up to 95% of the stock purchase. You'll work with your local lender to apply jointly with the Rural Finance Authority, which will cover up to 45% of the loan (maximum $40,000) at a fixed 2.0% interest rate or half your lender's rate, whichever is lower, with up to 8-year terms and 2 years of interest-only payments allowed. You must be a Minnesota resident with a net worth under $607,616 (2026 threshold, indexed annually) and a grower of the agricultural product being processed.
This program enables your farmer-customers to finance cooperative stock purchases for value-added agricultural ventures, including wind and anaerobic digestion projects, removing a financing barrier to their participation. As a lender, you'll originate the loan and then have the Rural Finance Authority participate up to 45% of principal (capped at $40,000), reducing your risk while the RFA charges a below-market fixed rate of 2.0% or half your effective rate. You must have a completed Master Participation Agreement on file with the RFA and accept applications on a first-come, first-served basis with a $50 application fee per submission; security must equal at least 150% of the total loan amount.
This participation loan program, established in 1994 and administered by the Rural Finance Authority, helps Minnesota farmers finance cooperative stock purchases for value-added agricultural products, livestock processing, and renewable energy (wind, anaerobic digestion). The RFA funds up to 45% of loan principal to a maximum of $40,000 per loan at a fixed 2.0% rate or half the lender's effective rate, with an aggregate cap of $2 million per cooperative; loans run up to 8 years with interest-only options for 24 months. Eligible applicants are Minnesota resident farmers with net worth below the annually indexed threshold ($607,616 in 2026), and the program targets beginning and small-scale agricultural entrepreneurs seeking to add value through cooperative investments.
Program details
- Program ID
- 206
- Effective
- 1/26/1994
- Last updated
- 7/29/2025
Eligibility
- Sectors
- agricultural
- Technologies
- solar photovoltaics wind (all) biomass wind (small) anaerobic digestion
Program summary
The Value-Added Stock Loan Participation Program was created in 1994 and is designed to help farmers finance the purchase of stock in certain types of cooperative, limited liability company, or limited liability partnership that will produce a "value-added agricultural product." This may include wind energy and anaerobic-digestion cooperatives if they meet the eligibility requirements (see Statute and Rules for details).
Like Minnesota's Agricultural Improvement Loan Program, this is a "participation loan" program, where loans are made by individual financial institutions working with the Rural Finance Authority (RFA). The RFA purchases up to 45% of the loan principal up to $40,000. The interest rate offered by the RFA is then set at a fixed rate of 2.0% or half the lender's effective rate at closing. Loans are for a maximum of 8 years, and interest-only payments are permitted for the first 2 years. Interest and loan principal repayments are deposited back into a revolving loan account. The RFA is not permitted to make stock loans cumulatively totaling more than $2 million for the financing of stock purchases in any one cooperative.
The program will not finance more than 95% of the price of the stock purchased by the participant. To qualify, an applicant must have a total net worth of less than $592,219 in 2025 (indexed annually for inflation), including the assets and liabilities of the applicant's spouse and dependents.
Contact & resources
- Contact email
- Gary.Blahosky@state.mn.us
- Additional resources
Please verify current program details with the administering agency before making any financial decisions.
