Living in the country and having land that you can turn into a functioning farm or garden is the American dream. While you can always pay for your dream home and property with a conventional mortgage, it’s not your only option. In fact, there are loans specifically meant to help people move to rural areas and live a more rustic, self-sufficient lifestyle. These loans are USDA farm loans. Here’s what you need to know about this unique financing option.
What Are USDA Farm Loans?
USDA farm loans are loans backed by the United States Department of Agriculture. This means the organization guarantees a portion of the loan should borrowers default. Since the loan is backed by the USDA itself, lenders are more willing to issue loans to borrowers with lower credit scores and on properties in areas where more conventional industries like retail or technology are less common.
The loans provide borrowers with lower interest rates and higher loan principals than they may qualify for in the city. If you choose to apply for a loan, you’ll be able to enjoy lower monthly payments and lower interest rates over the life of your loan.
How to Apply
The application process for USDA farm loans is similar to standard loans. You’ll need to apply through your preferred bank, credit union, or lender. However, unlike traditional mortgages, you’ll need to make sure the property is in a qualified rural area. The USDA specifies which areas are considered rural enough to qualify for the loan program.
If the property meets the requirements, your lender will be able to walk you through the documents you’ll need to provide and the qualifications you’ll need to meet. Keep in mind that most borrowers with credit scores over 650 can qualify for this type of financing. If you’re not sure where your credit score sits, check it online and do what you can to boost it before you apply for financing.
Partner with the Right Lender
Not all lenders offer USDA farm loans. This means you’ll need to do your research and choose a lender that’s familiar with this loan program. At MSF Agriculture, we specialize in helping individuals and families get the financing they need to quit the city life and start forging their own path. Learn more about our loan options and reach out to our team to discuss your needs today. We’re here to help you find the right loan for your rural lifestyle.