There are many options when it comes to financing rural land, including residential vs. commercial farms vs. hobby farms and more.
Each loan program takes into account the size, price, and purpose of your land. All three of these factors and more can determine whether you qualify for a rural residential vs. commercial farm loan. Learn more about the differences below from the loan providers at United Ag Lending.
Rural residential loans
Rural residential loans are built for those looking to own a home on a rural piece of land. Rather than financing the house through a mortgage, you can finance the entire piece of land.
Rural land loans can be the solutions you’re looking for to purchase a new piece of land, refinance land you already own, or add on to your existing property.
Another key factor is the highest and best use of the land. This is a determination that is made by an appraiser when the land is on the market for sale. In order for the land to qualify for a rural residential loan, the highest and best use must be residential.
Some benefits of our rural residential loan program at United Ag are:
- Both 15 and 30-year fixed-rate loan options
- Refinancing and cash out loan options
- The ability to build on your land
- Can finance up to 160 acres of land
Commercial farm loans
Commercial farm loans are designed for pieces of land that intend to support commercial farming or agriculture operations like:
- Mixed crop and livestock farming
- Dairy farming
- Grain farming
- Livestock ranching
- Mediterranean agriculture
- Commercial gardening and fruit farming
- And more
Commercial pieces of land still go through an appraisal process similar to land that qualifies for a residential loan. The difference is that the highest and best use must be agriculture. In making this determination, the appraiser will also indicate which crop is best suited for the land.
Related:
Your Guide To Commercial Agriculture Loans
Some benefits of our commercial farm loan program at United Ag are:
- Loans for a number of different industries: logging, forestry, nurseries, orchards, vineyards, dairies, ranches, cattle and more
- Fixed-rate loans up to 30 years with no prepayment penalty or adjustable rate products
- Monthly, annual, or semi-annual payment options
- Loans up to 70% of value offered
- And more
Explore residential vs. commercial farms with United Ag
Whether your land is residential vs. commercial, we can help. If you’re ready to start exploring farm loan options, we’re ready to be your financial partner. Get started with us at United Ag Lending and see what our flexible loan programs can do for you.
Or, give us a call at 888-204-9430.
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