"Farm" Loan with under 20% down?

Question

So, I found a home that I would like to buy. It is on 20 acres and has 10 acres of cherries on it. I don't intend to work the cherries (the current owner leases them), but because of them, I have been told that it qualifies as a farm and I cannot get a conventional mortgage. All farm mortgages I have found require 20% down and I cannot afford that right now. I could do 10%, but not 20%. Any ideas?

Charles Goetz · Answer

@Joe Edwards-Hoff You can get a farm loan from the US Department of Agriculture. I'm not sure of the down payment requirement, but the interest rate is around 3%. This applies to some rural properties as well. They do have certain criteria, but it's worth checking out.

https://www.fsa.usda.gov/programs-and-services/farm-loan-programs/

Nik Moushon · Answer

Don't look to get a "farm" loan. Thats basically a commercial business loan...just for farming instead of running an accounting firm. Look at agricultural lending credit unions and companies. Most of those will have a home mortgage of some type. They typically have other restrictions like 20ac minimum for lots or existing farm houses, etc. Sometimes they even have location requirements that you have to be in the county and not city limits. They always, at least from what I've seen, are for personal home only though. I think one company is called Ag America Lending....or something like that. Also find small local farming banks. They typically do these types of non-traditional house mortgages.

Joe Edwards-Hoff · Answer

Dave- I private messaged you.

I think another fear with going conventional is whether the house would appraise for the asking price if the orchard isn't taken into account... ir the cashflow from the two rentals.

Neel BS · Answer

Hi Tim - are you listed in Florida?

Dan Wallace · Answer

I am familiar with this type of "ag" loan and there are a few ways to approach.

Nik Moushon · Answer

@Joe Edwards-HoffI found an email from looking into lending for ag land when I was looking at buying 300+ ac. - AgAmerica Lending 863 - 607 - 9500They are based in Florida but do loans in a lot of states. I also have a list of banks, local to me though, but its at home. Ill try to remember tonight to look at it and see if there are any other on there.

Narinder Gill · Answer

@Joe Edwards-Hoff have you tried USDA loan? Find a local office in WA and discuss your situation with them. First time farmers can get up 600k loan at very good rates.  With good credit they might not require 20% down.

Good luck

Dave Skow · Answer

Joe - thanks ...let me do some research for you ....what is  your email address ?

Joe Edwards-Hoff · Answer

Dave-total 20. 2541 Wilson Hwy Grandview WA, 98930.

I assume zoned agricultural.

I have been trying the local banks and credit unions.

Dave Skow · Answer

Joe - so is it a total of  30 acres ?   what is zoning ?   any idea of what lenders  have  provided  loans on the property in the past?   have you contacted the local banks and credit unions in the area for options  ?

"Farm" Loan with under 20% down?

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