Forms Required: Signed Tax Returns/Income statements for previous three years Brief narrative analysis of the ranching or farming operation Current market value balance sheet (within 60 days) Market value balance sheets for previous three years Verification of non-farm income (copies of the two most recent pay-stubs for each applicant employed off-farm) Loan Application signed by all applicants

Eligibility
The Borrower must be a United States citizen or a lawfully admitted alien to the United States who maintains a permanent residence in the United States or a corporate entity or partnership whose members, stockholders or partners holding a majority interest in the corporate entity or partnership are citizens or lawfully admitted aliens.

Loan Purpose
Loan proceeds may be used for:

1. Sources and Uses of Funds – The sources and uses of funds for the transaction are to be summarized.
2. Primary and Secondary Loan Purpose – The primary and secondary loan purposes are to be summarized, based upon dollar amount, into the following categories:
1. Purchase Real Estate – Proceeds used to pay for the purchase of the collateral offered as security.
2. Refinance Real Estate Debt – Proceeds used to refinance existing real estate debts.
3. Funds for Improvements – Proceeds are used to make improvements on the collateral offered as security.
4. Refinance Non-Real Estate Debt – Proceeds used to pay off existing debts such as operating loans, equipment loans, or other debts.
5. Cash Out – Proceeds are being used for another purpose not listed above. Sellers are to disclose the specific use of proceeds in a cash-out refinance.

Summary
There are six (7) Dakota Mac Underwriting Standards as summarized below. As used throughout Parts 2 and 3, “pro forma” connotes a restatement of the financial data of the entity being financed, to include in that entity’s current and historical financial statements the assets collateralizing the proposed loan, income derived from those assets and the proposed loan.

Standard 1:
A complete and current credit report is required for each applicant and guarantor, if any.

Standard 2:
Financial statements of each Borrower are required for at least each of the past three (3) years (of even date).

Standard 3:
The Borrower’s pro forma debt-to-asset ratio should be 50% or less, on a market value basis.

Standard 4:
The Borrower’s pro forma total debt service coverage ratio should not be less than 1.25:1, including net income from farm and non-farm sources; and a pro forma current ratio should not be less than 1:1.

Standard 5:
The loan-to-appraised value (“LTV”) shall not exceed 65%. A minimum 1:1 cash flow/debt service coverage ratio from the subject real estate is required.

Standard 6:
The agricultural real estate securing the loan must consist of at least five (5) acres of producing land or be used to produce annual receipts of at least five thousand dollars ($5,000).




Standard 7:
Triple-Merged Credit Report
A triple-merged credit report must be obtained for each applicant. The minimum allowable score for individual applicants is set forth in the table below:



Minimum Credit Score
Loan Size	<$400,000	660
Loan Size	> $400,000	680

An applicant’s credit report must indicate he/she has a history of repaying creditors in a timely manner. The Seller must provide an explanation for any derogatory credit reported during the previous 24 months. A poor credit history alone may be the basis for denying a loan.

Mortgage indebtedness must be verified. If outstanding mortgage debt is not reported in the triple-merged credit report, the Seller must obtain and analyze:

1. A written mortgage debt and repayment performance verification that reports a minimum of the most recent two full years’ performance, or
2. An IRS form 1098 for each of the last two years for each outstanding mortgage debt that is subject to IRS reporting.