If you don’t make your living from your farm full time but still have the passion for farming, there is another type of program we have many options for: hobby farms.   

At United Ag Lending, our hobby farm mortgage is for those interested in having a farm for enjoyment or for part-time work that they live on at least some of the time. 

What is a hobby farm?

A hobby farm is a small-scale farm without the sole purpose of making an income. It’s exactly what it sounds like—a farm devoted to exploring your hobbies. 

Related: What is hobby farming?

What are some perks of hobby farming? 

  • Hobby farms are much less land/space to upkeep as opposed to more traditional farms
  • You can explore all kinds of agricultural related hobbies
  • You can make your farm completely unique to you; you have total freedom to choose what you want to cultivate
  • They allow you to save money at the grocery store (if you grow crops)
  • You have the ability sell your produce for a little extra cash 
  • Hobby farming can help you feel more connected to your community

Commercial vs. hobby farm

As you probably already know, a commercial farm has a sole purpose of making money. If you want to start a farm to produce goods and sell them—whether it’s milk, livestock, or crops—that is a commercial farm. There doesn’t have to be a residence on the farm, but there can be.  

A hobby farm is not usually financially motivated. The sole purpose of a hobby farm is for a farmer to be able to focus on a type of farming or hobby they want for enjoyment. A hobby farmer can focus on as much or as little as they want. Regardless of how much the farmer chooses to invest in their farm, the farm must have a home on it. 

Also, the loan for a hobby farm covers the land and the home. One important thing to note here is that the value of the land can be higher than the value of the home. 

Hobby farms are generally much smaller-scale than commercial farms and don’t provide primary income for borrowers. Is there a possibility for extra income? Absolutely. 

But, it depends on what your goals are and how you play your cards. 

If you’re solely motivated to make a living from your hobby farm, then our hobby farm loan program probably isn’t for you.  

Related: 4 Ways to Start Hobby Farming

Hobby farm loan requirements at United Ag Lending

Because a hobby farm mortgage doesn’t meet the conventional requirements of lenders, many lenders are unable to finance this type of property. 

At United Ag Lending, we’ve made it our mission to create a hobby farm loan program that can meet our farmers where they are. If you finance with us, there will be no surprise requirements that stand in your way.

Requirements checklist

◻️ Property is agricultural in nature

◻️ 5 acreage minimum

◻️ 680 minimum credit score

◻️ It has a home on it which serves as your primary residence or second home  

If you check all the boxes, we want to hear about your hobby farm goals. 

Send us a message or give us a call so we can set up a consultation. 

If you don’t meet our minimum requirements, though, we’re happy to discuss how you can make adjustments and work toward reapplying in the future. 

Hobby farm mortgage program benefits 

With a hobby farm mortgage through United Ag Lending, you can cash in on the following benefits: 

  • Make an income (not sole income)
  • House up to 50 head of livestock on the land
  • Own multiple parcels of land and parcels within reasonable proximity 
  • Explore loans up to $2 million with Schedule F (Farm) income allowed
  • Fixed 15- and 30-year terms available
  • Have a home with up to 160 acres (more allowed on a case-by-case basis)
  • Ag-Exempt property allowed 
  • Purchase, rate/term, and cash out refinances to pay off:
    • Debt
    • Home or land improvements
    • Or serve as cash in hand
  • Consolidate land and construction loans into a permanent mortgage loan
  • Primary homes or secondary homes capability 
  • Land value can exceed 30% of appraised value
  • Dwelling value only requires to be 25% of value (lower allowed on a case-by-case basis)
  • Have a horse facility with indoor/outdoor arena with no limitation on horse stables
  • Have shed homes, barndominium with typical living quarters, log homes, or multiple homes on your property

Our hobby farm mortgage loan is designed to flexibly support farmers in any way we can. 

If you meet our short list of requirements and have questions about what our program entails, let us know. We’re here to help. 

Hobby farm FAQs

We’re throwing a lot your way, so let’s take a pause and cover some frequently asked questions we hear as hobby farm lenders

Can I make money from my hobby farm?

Depending on your level of dedication, you can make some income off your hobby farm, but it likely won’t fully support you. The purpose of a hobby farm is to explore hobbies and small-scale farming for enjoyment. 

If you’re a farmer looking to make a living off your farm, explore our commercial farm loan program

What can I do with a hobby farm mortgage? 

The best part about this type of farm and program is it’s completely up to you. You can choose to explore whatever you want. 

We’ve seen berry farming, beekeeping, chickens, and dozens more. Plus, you don’t necessarily have to pick just one; it’s for fun after all. 

How many acres is a hobby farm?

Hobby farms can be up to 160 acres. We require at least 5 acres of land for our hobby farm program. 

Can I live on my hobby farm?

Yes, you can live on your hobby farm. In fact—for us to consider it a hobby farm, it must have a house on it. It must be your primary or secondary residence. 

How do I get started with hobby farming? 

The best way to get started with hobby farming is narrowing down what you are interested in exploring and devoting your farm to. This can be an ongoing process, but you should at least have an idea and some plans for your hobby farm. Make sure you do your research. 

Our ag loan experts will want to know that you’re serious about your hobby farm and it isn’t just a fleeting dream.  

Can I write off hobby farm expenses on my taxes? 

If you are making a little income from your hobby farm, then consult your tax advisor, there are tax write-off opportunities you can dig into. Check out this guide for what you can do with your hobby farm during tax season

Can United Ag Lending provide loans for operations, equipment, or livestock?

No. United Ag Lending does not offer loans for farming operations, purchase of equipment, or the purchase of livestock. Your hobby farm mortgage can only cover the home and farm expenses. 

Our hobby farm mortgage process

The process of hobby farm financing with the ag professionals at United Ag Lending consists of 3 main steps: a Consultation, Recommendations and Application, and a Continued Resource. 

Step 1: Consultation 

The first step to pursuing your hobby farm (after doing your research and some planning) is meeting with us for an initial consultation. It’s essentially a low pressure conversation where we learn about you and your hobby farm plans.  

We will discuss:

  • Your qualifications and financial standing
  • Your plans for your farm
  • Our loan program and how we can customize it to suit your plans

Questions we’ll ask you 

As long as you meet our requirements, we aren’t picky about the way you use your hobby farm. Nonetheless, we will ask you these questions: 

  • What do you want your hobby farm to focus on?
  • Are you wanting to make any income?
  • What loan amount will you need?
  • How do you plan to use the funds?
  • What do you project your hobby farm to be like in a year or two?
  • Will you live on your farm full-time or part-time?

Step 2: Recommendations and Application

We’ll go through your plans, financials, and discuss which program benefits you may want to opt into. 

Our loan experts will then take this information and develop your personalized hobby farm mortgage program. You’ll have a chance to review it and ask any questions. 

If the program fits with your hobby farm goals, you will begin the application. Our experts will assist you along the way.

Document checklist 

These are the following documents/records we’re going to need to see during this step:

◻️ 2 to 3 years of tax returns

◻️ Bank statements

◻️ Asset information (stocks, retirement account, etc.)

◻️ Pay stubs

◻️ Driver’s license or government ID

Step 3: A continued resource

Once the loan is in your hands, you’re free to put your plan into action. If you have questions or need any advice, the ag experts at United Ag Lending are here to help. 

Something we value is being a long-term resource to our farmers. We aren’t going to process your loan and hang you out to dry. 

Contact us anytime you need. 

Explore your hobby farm loan options with United Ag Lending

Your hobby farm mortgage options are endless; we’re looking forward to helping you figure out your goals. If you have any questions, don’t hesitate to let us know. 

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States we serve for hobby farming:

Arizona, Arkansas, California, Colorado, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Mississippi, Missouri, Montana, New Jersey, New Mexico, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Washington, Wyoming.