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Iowa’s Beginning Farmer Programs: Loans & Tax Credits to Help the Next Generation Succeed

  • Andrew Benning
  • 5 days ago
  • 3 min read

At Mid Iowa Real Estate, Auctions, & Appraisals, we’ve spent decades helping Iowa farmland change hands. We know that farming isn’t just a career, it’s a legacy. However, for many young or first-time farmers, the biggest hurdle is often the same:  financial constraints.


Buying farmland, machinery, livestock, and buildings requires a significant investment, whether you’re starting from scratch or looking to grow your operation. That’s where the Iowa Finance Authority’s Agricultural Development Division can help.


They offer two programs designed to make entering agriculture more attainable:

  1. The Loan Program – providing below-market-rate financing and down payment assistance for purchasing land, equipment, livestock, and other farm essentials.

  2. The Tax Credit Program – rewarding landowners who lease to beginning farmers with generous tax incentives, creating a win-win for both parties.


These programs can open doors for the next generation of Iowa farmers, whether that means stepping onto your first farm as an owner or building experience through a lease. They also give the older generation an incentive to give beginning farmers an opportunity.


The Loan Program: Affordable Financing for New Farmers


The Beginning Farmer Loan Program is designed to give new farmers access to lower-cost financing for major purchases.


Here’s how it works:

  • Funds can be used to buy agricultural land, machinery, equipment, buildings, breeding livestock, or to make farm improvements

  • Interest rates are typically 20–25% below market rates, which can mean thousands of dollars in savings over the life of the loan

  • Your lender or contract seller sets loan terms, but with IADD approval, the rate locks in for a 10-year term


Who’s eligible?

  • Iowa residents at least 18 years old

  • Must be an owner/operator with the training and experience needed for the farm operation

  • Net worth must be below $820,000 in 2025. This changes yearly with inflation


The Tax Credit Program: A Win-Win for Landowners & New Farmers


Not every beginning farmer is ready to purchase land right away. Leasing can still be a great path to ownership. The Beginning Farmer Tax Credit Program makes leasing attractive for landowners, while giving beginners a chance to get their foot in the door.


Here’s how it works:

  • Landowners who lease to a qualifying beginning farmer can earn tax credits:

    • 5% for cash rent leases

    • 15% for crop share leases

    • 15% for the flex lease portion of a lease

  • Leases must be for 2–5 years

  • Eligible assets include ag land, machinery, equipment, buildings, and/or livestock


This program benefits everyone:  landowners get a tax incentive, and beginning farmers gain access to the land and resources they need to grow their business. The leases also must be longer-term, which helps the beginning farmer get a foothold.


Why These Programs Matter for Iowa’s Future


Farming has always been about stewardship, tradition, and passing on knowledge. Without access to affordable capital or land, many aspiring farmers never get the opportunity to prove themselves.


The Iowa Finance Authority’s Beginning Farmer Programs help change that by making it possible for:

  • Young farmers to purchase their first farm or lease land at an affordable rate

  • Landowners to support the next generation while earning valuable tax benefits

  • Communities to keep agricultural land in production and in the hands of local farmers


By lowering financial barriers and encouraging partnerships between new and experienced producers, these programs ensure Iowa’s agricultural future thrives for generations to come.


Ready to Explore Your Options?


If you’re a beginning farmer aspiring to own or lease land, or a landowner looking to help the next generation, Mid Iowa Real Estate, Auctions & Appraisals can help you navigate these programs and find opportunities that fit your goals.


Contact us today to talk about farmland, financing, and the future of Iowa agriculture. Also, view our blog on FSA options for beginning farmers.


Contact Information:

Office Phone: 641-648-5065

Cell Phone: 641-903-9607

Visit IowaFinance.com for full program details

 
 

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© 2017-2025 Mid Iowa Real Estate, Auctions, & Appraisals. Information is provided exclusively for consumers' personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. Information deemed reliable, but not guaranteed.

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