1. A. LAFA bonds may not be used for the following purposes, except as provided under this rule:

   1. 1. land acquisition, except that:

      1. a. 25 percent of a loan may be used to acquire
         non-farm land; and

      2. b. first-time farmers may utilize a maximum of $250,000 in loan proceeds to purchase land to be used for farming; if

         1. i. the borrower meets the definition of first-time farmers contained in §101;
         2. ii. the borrower will be the principal user (as defined in §101) of the land; and
         3. iii. the borrower will materially and substantially participate in the operation of the farm of which the land is a part;
   2. 2. acquisition of existing agribusiness facilities (used buildings or equipment), except that, the restriction against use of loan proceeds to purchase existing facilities does not apply to any building, and the equipment therein if at least 15 percent of the cost of acquiring the building and equipment are used for rehabilitation expenditures;
   3. 3. working capital;
   4. 4. production expenses;
   5. 5. refinancing of existing indebtedness;
   6. 6. financing of residential housing;
   7. 7. purchase of any property from any related person (as defined in §101 of these regulations); or
   8. 8. purchase of property from a partner of the borrower, when the borrower is a partnership, regardless of the degree of the partner's interest in the borrower.

Authority Note

AUTHORITY NOTE: Promulgated in accordance with R.S. 3:266, R.S. 3:270 and Section 103(b)(6) of the Internal Revenue Code of 1954, as amended.

Historical Note

HISTORICAL NOTE: Promulgated by the Department of Agriculture, Agricultural Finance Authority, LR 10:868 (November 1984).