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Young Farmer Interest Rate Reduction Program
Deadline: Open Enrollment

Objective: The Young Farmer Interest Rate Reduction (YFIRR) Program is intended to facilitate a lower interest rate to agricultural producers or agribusiness owners who are between 18 and 46 years of age through a commercial lender. The YFIRR program provides an interest reduction to the borrower on a qualifying bank loan for an eligible project. The Comptroller of Public Accounts for the State of Texas deposts funds in a bank (which must be a state approved depository) at a below market interest rate.  The bank issues a loan of like amount, at no more than 4% above the interest rate on the state's deposit. The program does not offer a guaranty or participation by the Authority in the loan. 

Program Funding: Program funds are distributed through the Texas Agricultural Fund. A borrower may have more than one linked deposit loan. The total of linked deposit loans to any one borrower cannot exceed $500,000. All linked deposits under this program shall expire upon the expiration of the biennium; however, subject to legislative authorizations and approvals, expired linked deposits may be renewed.

TAFA/TDA assists eligible lenders in acquiring capital through the Texas Comptroller of Public accounts for loans that will be made to agricultural producers or agri-business owners. TAFA reviews project applications to ensure the projects meet TAFA’s requirements, and recommends them to the Comptroller. Upon approval from the Comptroller, the lender is granted capital at a reduced interest rate and passes savings to the borrower.  


 •      Any person who is 18 years of age but younger than 46 years who proposes to use loan proceeds for the creation or expansion of an agricultural business in Texas.
 •      The applicant should discuss the program with his or her lender and have the lender submit the application.
 •      Eligible lenders include any financial institution that makes commercial loans and is an approved depository for state funds.
 •      Farm Credit System lenders are not eligible because they are not able to accept deposits form the Comptroller of Public Accounts.
 •      The lender and the borrower determine the repayment, maturity and collateral for the loan.  

Use of Funds:
Loan proceeds may be used for any agriculture-related operating expense, including:
 •         The purchase or lease of land;
 •         Fixed asset acquisition or improvement; and/or
 •         Any enterprise based on agriculture, as identified in the application.
 •         A loan under this program may be applied to existing debt only when required by the lender to finance the expansion of an eligible project.  

Interest Rate Determination:
The Comptroller of Public Accounts places a linked deposit with a participating financial institution. The interest rate on the linked deposit is determined on the date the loan is funded and based on matching the loan maturity date to the closest U.S. Treasury bill or note maturity date or the end of the State’s fiscal biennium (Aug. 31 of each odd numbered year). Typically, YFIRR loans offer interest rates lower than current market rates.

Term Requirements: The lender and the borrower determine repayment, maturity and collateral for the loan.


For More Information Contact:

Roxana Newton

Bon Wier