Maine Farmers Get Closing Cost Help From Credit Union

A credit union in Maine has launched a program to cover closing costs connected to the purchasing and refinancing of farmland in the state.

Maine Harvest Federal Credit Union designed the program to help potential borrowers take advantage of historically low interest rates by reimbursing them up to $3,500 per loan.

The rollout of the Conservation Grant Program comes a year after the Maine credit union was chartered by the NCUA. With that charter, MHFCU said it became the first and only financial institution focused on lending to small farmers and food producers.

Scott Budde, CEO and co-founder of MHFCU, said he hopes the program incentivizes farmers to pursue opportunities to buy land, expand acreage or reduce their monthly mortgage costs.

“Closing costs on farm loans are high, and often make it financially difficult to refinance, even at lower rates,” Budde said.

“Our mission is to improve Maine’s local food system through responsible lending – ultimately strengthening the position of Maine’s hard working small farms and food producers,” he added.

To qualify for the program, borrowers are required to have the Maine Organic Farmers and Gardeners Association analyze land using software developed by the Natural Resources Conservation Service of the U.S. Department of Agriculture. The software is designed to identify opportunities to improve soil, water and environmental quality. Farmers are not required to implement the suggested conservation practices to qualify.

The credit union said it encourages organic and non-organic farmers to apply if they are interested in refinancing or buying Maine farmland.

“We are seeing increased interest in new farmland financing at these lower rates, which is a positive sign for the industry at-large,” Patty Duffy, MHFCU’s chief lending officer, said.

In addition to driving down interest rates, the coronavirus outbreak has brought increased demand to farms, as consumers increasingly look to food produced locally, according to Amanda Beal, Maine’s agricultural commissioner.

“We hope that this positive trend continues post-pandemic, and that Maine farmers can find a way to take advantage of this loan program,” Beal said in a prepared statement.