U.S. Sens. Roger Marshall and Jerry Moran have introduced the Access to Credit for our Rural Economy (ACRE) Act. This legislation would allow community banks to administer agricultural real estate loans by granting them tax-exempt status on earned interest. The ACRE Act would benefit farmers and ranchers nationwide by making loans more accessible and affordable to agricultural borrowers.
Specifically, the act would amend the Internal Revenue Code to exclude interest received on certain loans secured by rural or agricultural real property from gross income; allow farm real estate borrowers and rural homeowners access to lower interest rates by expanding the same tax-exempt status on certain earned interest that applies to other lenders; apply to agricultural real estate and single-family home mortgage loans in rural communities with fewer than 2,500 residents and for mortgages less than $750,000; and expand access to affordable agricultural and home loans for more than 4,000 rural communities nationwide, saving producers well over $400 million in annual interest expenses.
“Persistent inflation and high interest rates are putting a strain on farmers and rural homeowners,” said Moran. “Rural Americans should have the flexibility to access the capital needed to expand their family farms and achieve the dream of homeownership. This legislation will help to boost rural housing and support the agricultural economy that plays a vital role in small towns across America.”