To be eligible for a VALU loan, an applicant must meet the following requirements:

1. (1) If the applicant is an individual, the applicant must meet the following requirements:

   1. (a) Be a resident of this state at the time of loan closing;
   2. (b) Have his principal residence and the majority of the farm operation located in South Dakota;
   3. (c) Be age 18 or older;
   4. (d) Have feed sufficient for one year, have facilities available, and have management capabilities;
   5. (e) Have derived at least 60 percent of all gross income in the last tax year from farming. Applications not meeting this qualification may be accepted only if a waiver is obtained from the commissioner. The commissioner may issue a waiver for extraordinary circumstances such as illness or enrollment in a higher education institution or postsecondary technical institute or vocational school;
   6. (f) Be creditworthy according to the standards of the lender; and
   7. (g) Be unable to provide the financing needed from the applicant's own resources or to obtain it from conventional sources at rates and terms the applicant can reasonably be expected to meet;

2. (2) If the applicant is a cooperative, corporation, partnership, or other legal entity, it must meet the following requirements;

   1. (a) Be composed of individuals who meet the criteria of subdivisions (1)(a) to (1)(g), inclusive, of this section and who must be willing to subordinate or waive individual interest in the required feed, facilities, and labor necessary for the success of the loan; or
   2. (b) Have the majority of memberships and stock in the entity owned by farmers who meet the criteria of subdivisions (1)(a) to (1)(h), inclusive, of this section with other members or stockholders furnishing their proportionate share of the costs. They must be willing to subordinate or waive individual interest in the required feed, facilities, and labor necessary for the success of the loan;
3. (3) Coapplicants must meet the same criteria as the applicants in the applicable category.

Source: 17 SDR 141, effective March 25, 1991; 28 SDR 119, effective March 5, 2002; 29 SDR 34, effective September 18, 2002; SL 2019, ch 235, § 37 and 38, effective April 14, 2019.

General Authority: SDCL 1-53-30 .

Law Implemented: SDCL 1-53-24, 1-53-29 .

Prior versions effective: 2002-09-18.