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Serving: IA
Low-Interest Loans For Soil Conservation Practices

Low-Interest Loans For Soil Conservation Practices

Iowa has a state loan fund to provide farmers low-interest loans to install soil and water conservation practices. In fiscal 2010, nearly $12 million was loaned to help prevent erosion and to better manage livestock manure.

During the 2010 fiscal year nearly $12 million was loaned to Iowa farmers and land owners to install voluntary conservation practices that improve water quality. The low-interest loans are available through the State Revolving Loan Fund, which provides the money for the Local Water Protection and Livestock Water Quality Facility Loan Fund program.

"Since 2006 when this fund was created, over 1,800 farmers have borrowed more than $54 million to support additional soil and water conservation efforts on their farms," says Northey. "As those funds are repaid they are loaned out again to continue to support soil and water conservation in our state."

To apply for funds, farmers and landowners work with the local Soil and Water Conservation District in their county. Applications for the loans are accepted at any time during the year and are typically processed in a few days.

Virtually all soil and water conservation practices are eligible

Once approved, the loan recipient will work with an approved local lender who will make the loan. The Iowa Finance Authority then deposits funds equal to the principal amount of the loan at 0% interest with your lender. This deposit enables the lender to reduce the interest rate charged to the borrower.

Virtually all practices eligible for state cost share, Resource Enhancement and Protection and Environmental Quality Incentive Program are eligible for these soil conservation loans. The practices covered include, but are not limited to:

• Terraces, grade stabilization structures, water and sediment control basins

• Pasture and hay land planting or prescribed grazing

• Grassed waterways and filter strips

• Field borders, windbreaks and buffers

• Waste storage facilities

• Deep bedded buildings or other roofed manure control structures

However, loans to implement practices for animal feeding operations can only be made to livestock operations that are under 1,000 animal units and operations that are not required to have an NPDES permit.

Great program to prevent erosion and manage manure better

Loans can be for $5,000 up to a maximum of $500,000 per borrower and can fund up to 100% of actual costs. The terms are up to 15 years and a fixed interest rate of no more than 3% for the life of the loan.

Funding comes from the Clean Water State Revolving Fund, or CWSRF, a water quality financing program administered by the Iowa Department of Natural Resources and the Iowa Finance Authority. The CWSRF uses a combination of federal capitalization dollars, leveraged bonds, repayments and interest earnings to generate a continually revolving and growing fund that helps Iowans protect water resources. "This is very effective program. It is another example of minimal state support in terms of public tax dollars generating a significant investment by Iowa farmers and landowners to install soil and water conservation practices that allow them to better care for their land," says Northey.

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