The South Dakota Beginning Farmer Bond Program (SDBFBP), is a tax-exempt bond program designed to assist Beginning Farmers in the State of South Dakota to acquire agricultural property at lower interest rates.

The Program enables lenders, individuals, partnerships, corporations, and other entities (referred to as the “Bond Purchaser”) to receive federally tax-exempt interest with respect to a loan or contract sale made to Beginning Farmers. The Bond Purchaser, after arranging the loan or sales contract, will obtain from the Value Added Finance Authority (the “Authority”) a federally tax-exempt Private Activity Bond (PAB) in the amount of the loan or unpaid balance. The loan and its collateral will be assigned to the Bond Purchaser as security for the bond.