Agriculture still remains to be a big industry in the United States. Two million farms and ranches are spread across rural America. According to America’s Diverse Family Farms 2016 Edition, 99 percent of these farms are operated and/or owned by families. Much of the food supply we enjoy today comes from the productivity and efficiency of our American farmers and ranchers.
As these ranching families’ principal operators age, ranch land loans will slowly become a need. These will come in handy when lands are transferred to heirs or sold to new owners.There are many options when looking for a ranch land loan. From family-owned and operated ranches to commercial ones, large or small, there is a loan available.
Government-Backed Ranch Land Loans
There are direct and guaranteed ranch land loans offered by the federal government. The department responsible for this is the United States Department of Agriculture (USDA) under the Farm Services Administration (
FSA). These loan products are designed to assist farmers and ranchers with their land ownership financing needs.
Direct Farm Ownership Loan
The FSA provides 100 percent financing to purchase ranch lands. This loan can also cover expenses for expansion, land easements, improve ranch infrastructures and soil and water conservation. The Direct Farm Ownership Loan can be taken as a regular loan, a joint financing or as a down payment. This direct loan is financed and serviced by the FSA through your local farm loan officer or manager.
For the budding ranchers, they can take advantage of two microloan types: Direct Farm Ownership Microloans and the Direct Farm Operating Microloans. The financing comes from the FSA. Unlike the Direct Farm Loans, microloans are capped at $50,000 with no minimum loan amount.
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FHA Guaranteed Farm Loan Programs
Unlike the Direct Farm Loan where you get 100 percent financing from the FSA, Guaranteed Farm Loans are funded by a USDA-approved private lender. The FSA backs the loan and guarantees it up to 95 percent.
The EZ Guarantee Program is one of the farm loan products of the agency. It aims to help family farmers and ranchers avail of smaller loans. The funding can be up to $100,000. It can be used towards farm or ranch land ownership expenses or for operating costs.
Commercial Ranch Land Loans
Many commercial banks offer
ranch land loans for a variety of purposes. These banks have dedicated departments to take care of these specialized needs. Others have cultivated a deep knowledge of the local’s farming and ranching industry that it has come up with loan products to cater to their local farmers and ranchers.
Commercial banks have helped many American farmers. Their rates can be competitive and can vary widely. As there are a lot of commercial farm loans in the market today, shopping will help you find a ranch land loan that will address your needs best.
Having a ranch and raising livestock would need large expanses of land. The size of the acreage determines how large the ranch’s operation will be. While expenses can be a challenge, ranch land loans may be of great help in more ways than one. With many great products, it’s good to explore your options.
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