Financing for Land, Farming and Agriculture.

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 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. The debt-to-asset ratio is total debt divided by total assets. Some lenders require farming/agricultural experience. The value of the dwelling and other permanent outbuildings may have specific limits relative to 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. Rates are subject to change based on economic conditions and 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. Lenders view these loans as higher risk because of the lack of immediate income production. Down payments can be higher and lenders may require stronger income and financial credentials such as higher credit scores and larger cash reserves to qualify.

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.