September 22, 2022
Does a farm loan for a hobby farm sound like a good investment for your time and money? Good news! The Farm Loan Center can help you by advising you on how to apply for loans for both hobby farms and VA loans. Farm Loan Center provides lending options for farms and agricultural properties in all 50 states.
A hobby farm is a farm used primarily for pleasure or supplemental income. The owner of a hobby farm usually has another primary source of income. The main point of a hobby farm is not to make money, it’s just something to be engaged in as a hobby.
If you’ve looked into a hobby farm loan before, you’ve probably noticed that many lenders are not interested in making these investments. This is where we come in by helping you find and apply for a loan that meets your needs.
The guidelines and requirements for the loan and the property are:
- The minimum loan amount for a hobby farm loan is $100,000
- Maximum loan amount is $3,000,000
- You can receive financing for up to 80% of the purchase price without needing mortgage insurance
- You can refinance or cash out up to 80% of the appraised value of the property
- The hobby farm can serve as either your primary residence or your second home
As with all loans, there are also borrower requirements:
- Your income must be verified with pay stubs and/or copies of your tax returns
- Your credit score should be over 620, and there is no stated income documentation
- Your debt-to-income ratio must not exceed 36%
- The dwelling must be 25% of the overall value of the property
Whether you’re looking to try your hand at agriculture for the first time with a hobby farm in Illinois, or you’re an experienced rancher in Texas, we can help you find the right loan program for your needs and budget. Contact us at (800) 644-9039 or fill out an online application. We can help you attain the lifestyle you want.