What Type of Home Loan Is Best for Farms and Homesteads?


| 7/13/2017 4:02:00 PM



James White

AS6_4824-154

A few years ago we bought a house in the rolling farmlands of Pennsylvania. After some initial research, I thought the USDA loan that's specific for buying rural land especially for agriculture was going to be best. But after I started comparing all loans, I realized just a local credit union's conventional loan would save me more money over the long run.

Of course, every person is going to have a different situation. However, before you decide what type of home loan is best for your needs, please make sure you ask around and get all the details on fees, interest rates, etc. before deciding.

Below you'll find some of my research on the different types of mortgages and when they might come into play.

USDA Loans

The United States Department of Agriculture (USDA) and the Farm Service Agency (FSA) offer loans for farms and homesteads. A USDA/FSA loan to purchase a farm is called Farm Ownership — Direct. There are also USDA/FSA guaranteed loans, which are insured.



USDA/FSA loans require either no or a low down payment. They are intended for low- to moderate-income people, so part of the application will require that you don’t exceed the income limit.