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NE Indiana | If you're talking about the FSA beginning farmer loan program you have to show you've "participated in business operation of a farm for at least 3 years." Usually by providing copies of your schedule F.
If you have any farming related expenses and income, you file schedule F with your 1040 and whatever other forms.
In my opinion, that beginning farmer loan program is worthless.
- you have to put 5% down
- the loan cannot exceed 45% of the appraised value, with a maximum of $225,000.
- you have to be rejected by commercial lenders.
OK. So if the maximum loan amount is 45% of the price, and you have to be turned down by commercial lenders, where's the other 50% coming from? Mom & Dad I guess.
And commercial interest rates are so low it hardly makes any difference. The FSA loans have a lower limit of 1.5%. Farm Credit is advertising 3.5% on a 5 year adjustable land loan on their web site today. The 2% difference on that $225,000 FSA will loan you is $4,500/year. Nothing to sneeze at, of course, but if you're $4,500 a year between make or break, you're cutting it too thin.
Just my $0.02 worth... | |
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Buying Land - E Central IL
