As a new farmer, one of the largest obstacles you likely face is obtaining the farmland. The cost of the land and its upkeep can make it difficult to realize your dreams. Luckily, there is plenty of help out there for new farmers, whether it’s money for land or capital, you can find assistance.
Compare Offers from Several Mortgage Lenders.
Before you start looking, though, you have to take certain steps to prepare yourself to obtain the necessary financing.
Create a Business Plan
Just like any successful business, a farm needs a
business plan. Don’t let the thought of creating this plan scare you. It’s really just putting your dreams on paper. This way potential investors can see your vision and decide if it’s something they think will succeed.
Of course, no business plan is complete without a budget. You will have to get to that at some point, but start with getting your ideas down on paper. As you create the plan, you can tweak things to make the plan sound as secure as possible. Your budget shouldn’t be just for the present time either; you want to have a budget moving forward so that investors can see your plan for the future. They want to know that this is a long-term venture and not something you are putting together on a whim.
Get Advice from the USDA
Before you apply for financing, it’s best if you get yourself situated with proper training and resources. The USDA offers a variety of resources for new farmers just like you. Before you go to your local branch, you’ll need to gather some important information. Because the
USDA offices can help you with your business plan and finances, you need to bring as much pertinent information with you as possible.
Click to See the Latest Mortgage Rates.
Do you have experience as a farmer? Supply as much proof of it as possible. Do you already have a piece of farmland in mind? Bring the details with you along with any financials that you have to show your ability to purchase the land. You can get the information you need directly from your local USDA office or a Cooperative Extension office in your county.
As a part of the advice, you may be given opportunities for training. This will depend on the offices available in your area and your experience as a farmer. Be honest with the FSA and USDA regarding your experience so that you can be matched up with
the right program to help you move forward with your farmland purchase.
Obtaining the Farm Loans
The final step is obtaining the loans to purchase your farmland. If you are unable to secure financing the traditional way, you can apply for a loan with the FSA. Much like residential USDA loans, the FSA guarantees the loans for beginning farmers. You must be able to prove that you are not eligible for any other loan program first.
The FSA loans can help you buy the land, operate it, and even have living expenses as you build your farm business. If you are ineligible for an FSA loan or don’t want to take on that responsibility quite yet, you can also look for a farm offering a land contract. The FSA is also involved in this process, as they guarantee the contract for the owner for the first 10 years of the contract. During that time, the new farmer pays the owner of the land an agreed upon amount, which includes interest. Each payment gives the new farmer a small investment, which continues until the land, is paid in full.
You have many options to help you own the farmland you need to start your farming business. Using the USDA and FSA resources available to you will give you the best chances of being able to purchase the land you want.
Click Here to Get Matched With a Lender.