The best loan for agricultural land is usually a Farm Loan, an Agricultural mortgage, a USDA

loan or an Agricultural Bridge Loan. These loans are specifically made for buying or financing

farmland or rural property, so they’re a good fit for agriculture needs.

Property must be suitable for agricultural purposes (farming, ranching, etc.)

There must be a minimum of 5- 10 acres

Be prepared to make a down payment of at least 25-30% of the purchase price or have equivalent equity in the property if refinancing

Good credit scores with a minimum FICO score of 660

The loan cannot exceed a certain percentage of the property’s value, typically 70-75%

Debt Service Coverage Ratio - DSCR compares gross income generated by the property to the mortgage debt service- mortgage payment, taxes and insurance payments.

The debt-to-asset ratio is calculated by dividing the total debt by total assets. A lower ratio is considered better, as it indicates less financial risk.

Some lenders require some farming/ agricultural experience

The value of the dwelling and other permanent outbuildings may have specific limits relative to the total property value

Agricultural loan interest rates vary based on several factors including down payment and what category of loan your scenario falls into. As of November 2024, rates vary from 5.5% to 8% with loan terms as high as 40 years. It is important to note that these rates are subject to change based on economic conditions and specific lender criteria

For purchasing farms, ranches or any agricultural land, the down payment may depend on the income generated by the property but be prepared to make at least a 25- 30% down payment.

Yes, the USDA , Farm Service Agency and Farm Credit Services offer special loans for farmers.

These programs often have specific eligibility requirements. They can come with lower rates and down payments and also longer repayment terms to keep your payment down.

Yes. You can lower your interest rate and monthly payments, or you can access extra funds to make improvements, consolidate your debts or invest in new opportunities. Your refinancing options will depend on current mortgage rates compared to existing rates, as well as changes in the borrower’s financial situation.

Yes, you can get an agricultural mortgage on raw undeveloped land, though the requirements are typically stricter. The lenders view these loans as higher risk because of the lack of immediate income production. The down payments can be higher and lenders will require stronger personal income and financial credentials such as higher credit scores and larger cash reserves to qualify.

Yes, Working Farm Loans typically feature lower down payments, reduced interest rates, longer repayment terms, a variety of financing options, and more flexible credit requirements. Since working farms generate income, qualifying for these loans is often easier.