Working farms, tillable acreage, pasture, and agricultural property with buildings — financed as agricultural real estate, not as a house.
Farm purchase financing is an agricultural or business-purpose loan rather than a home mortgage. The lender underwrites the ground and the operation — soil, tillable acres, buildings, leases, and income — not just the borrower. Fixed and adjustable terms run from 5 to 30 years, with FSA guaranteed programs and Farmer Mac loans available on qualifying property.
The first thing most farm buyers discover is that their usual mortgage lender cannot help them. It is not reluctance — it is that a working farm does not fit the framework a residential lender uses.
A residential appraisal leans on recent sales of similar houses. A farm has a house on it sometimes, but the value sits in tillable acres, soil productivity, drainage, road frontage, a bank barn, grain storage, or a milking parlor. A residential appraiser has no basis for pricing those, and typically discounts or ignores them — which is how buyers end up with an appraisal far below the agreed price.
An agricultural lender starts from the ground instead. What is tillable versus wooded. What the soil will actually produce. Whether there is an existing lease and what it pays. Whether the buildings serve a working operation or are simply old. That framing usually produces both a more accurate value and a structure that fits how a farm actually generates money.
If you want a sense of what comparable ground has been bringing before you write an offer, start with a farm valuation.
Operating dairy, beef, grain, and produce farms with buildings and infrastructure in place. Where the operation has a record, the income is part of the underwriting and terms are generally the most flexible of any category.
Cropland and grazing ground, with or without buildings. Soil quality, drainage, and the tillable-versus-wooded ratio drive both value and terms. An existing lease to a working farmer strengthens the case.
Ground with barns, shops, storage, or a farmhouse alongside productive acreage. The buildings are valued for what they contribute to the operation rather than as residential extras.
Ground bought to expand an operation you already run. This is frequently the strongest case of all, because there is an established operation and an existing record behind the purchase.
Fixed terms at 5, 10, 15, and 30 years and adjustable terms at 5, 10, 15, and 30 years. Farms with income and buildings generally require less down than bare land. FSA guaranteed farm ownership programs and Farmer Mac loans are available on qualifying property, subject to underwriting.
Choosing between fixed and adjustable comes down to how long you intend to hold and how much payment certainty you want. A thirty-year fixed structure keeps the payment predictable through commodity swings, which matters more on a farm than on most property types. A shorter or adjustable structure can price better if you expect to sell or refinance inside a defined window.
On the down payment, the collateral does most of the talking. Productive tillable ground with buildings and good access supports more financing than marginal acreage. Documented operating history, off-farm income, and program eligibility all move the figure. Not all programs are available to every applicant.
Most farm purchases are financed with an agricultural or business-purpose loan rather than a home mortgage. The lender underwrites the ground and the operation, not just the borrower. Fixed and adjustable terms from 5 to 30 years are available, subject to underwriting. Contact Aaron Glick to go through the options.
A residential lender looks mainly at the borrower and a comparable-sales appraisal. An agricultural lender looks at soil productivity, tillable versus wooded acres, road frontage, buildings, leases, and whether the operation produces income. That changes the down payment, the term, and how the property is valued.
It varies with the property and the structure. Farms with income and buildings frequently require less than bare land, which commonly runs 20–40%. Operating history, off-farm income, and program eligibility all move the number. Not all programs are available to every applicant.
Fixed-rate terms at 5, 10, 15, and 30 years and adjustable-rate terms at 5, 10, 15, and 30 years. USDA FSA guaranteed farm ownership programs and Farmer Mac loans are also available for qualifying agricultural real estate.
Not necessarily, but income helps. A crop lease, livestock operation, or other farm revenue strengthens the case and can change how the loan is sized. Where the operation is young or the ground is not yet in production, off-farm income often carries more of the underwriting.
Yes. An existing lease is generally a positive, because it demonstrates the ground produces income. The lease term and rate matter, and it is worth reviewing the agreement before closing so there are no surprises about possession or crop rights.
Often yes. A conservation easement limits development, which affects appraisal and narrows which lenders are comfortable. Aaron Glick works with preserved ground regularly and can tell you early whether a specific parcel is financeable.
Aaron Glick, REALTOR® · PA License #RS374368 · (717) 259-3930 · [email protected]
Lime House Realty · (717) 840-1355 · 2100 E Market Street, York, PA 17402