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ower Interest Rates for Ag Real Estate?
The American Bankers Association (ABA) has won a long‑awaited victory with the passage of the Access to Credit for our Rural Economy (ACRE) Act. The law gives banks a 25 % tax deduction on interest earned from farm‑real‑estate loans, allowing them to offer lower rates to rural borrowers. ACRE was enacted as part of the One Big Beautiful Bill, a broad package that tackled many rural finance issues.
Ed Elfmann, ABA’s Senior VP for Agriculture and Rural Banking Policy, said the 25 % benefit is the result of three decades of effort. “When a bank issues a farm‑real‑estate loan, it can deduct 25 % of the interest income from its taxes and pass the savings on to farmers,” he explained.
ACRE’s goal is to reduce producers’ input costs and keep farmland in agricultural use. New‑purchase loans qualify for the tax break, so buyers can expect rates lower than those of a year ago. The legislation also serves as a tool for the next generation of farmers to acquire land, while giving banks a competitive edge to attract customers.
Although the act is federal, state implementation is voluntary. Kansas and Nebraska were first to adopt it, thanks to pre‑existing state‑level versions. Wisconsin, part of the same group, is poised to roll it out after the harvest season.
Looking ahead, ABA will push for a full 100 % ACRE benefit to further lower rates. Elfmann urges producers to discuss the program with their agricultural lenders.
The post “Lower Interest Rates for Ag Real Estate?” first appeared on The Farm.
