Starting a farm can be a difficult and costly affair. However, there are a lot of entities that assist in financing farming operations, some particularly in place to support veterans. Veterans that want to start a farm can find various state and federal programs that can help fund beginning or expanding farm operations. Most are available through the United States Department of Agriculture (USDA) Farm Service Agency (FSA) and agricultural lenders. One can also find programs that can help fund farm business development through the Veterans Affairs
Farm Service Agency Loans
The FSA has multitude of loan programs available for diverse operations and producers. Some are geared toward existing conventional operations while others focus on the needs of small, beginning, socially disadvantaged farmers and ranchers. It is possible to borrow up to $300,000 to use for the purchase of farm, land, livestock, poultry, equipment, or to use as startup expenses. (2) Operating Loans are in place to help a beginning farmer with living and operating costs so the farmer can focus on becoming competitive in the market. Farm Ownership Loans assist the farmer in providing access to land and resources. Microloans can be an important source supporting the beginner farmer financially throughout the first few years. These different loans are in place to help start a farm, improve existing farming operations, expand operation market, as well as strengthen family farming and ranching operations. One of the loans in that might be applicable, in particular for the new veteran farmer is the Beginning Farmers and Ranchers Loan. It is in place for farmers who have been in operation for less than 10 years.
Using a Veterans Affairs Loan to Buy a Farm
It is possible to use a VA loan to buy a farm. The Home Loan benefit may be used to purchase a farm, but there are some requirements. For this to be possible the farm must have a farm residence, and the veteran must live at the farm as their primary residence. The VA guaranteed loan must be used for residential purposes, therefore some farm properties such as livestock, crops, equipment and supplies cannot be purchased with this loan. However, there is no limit on the acreage of the farm land. If the veteran plans to reside on the farm, this loan might be a better option in place for the FSA’s Farm Ownership Loan since the VA loan is geared specifically toward veterans.
Other Loan Options
There are a few other loan options out there for veterans who want to start or expand their farming adventure as well. The Small Business Administration (SBA) have their Express Loan available. This is a guaranteed loan program through the SBA. The veterans will work with private lenders to secure loans while the VA program eliminates any upfront fees. The max loan amount is $350,000 for small business ventures, including farms. (5) Other loan options that do not necessarily have any benefits specifically for veterans include local banks, private contracts, farm credit services and aggie bond programs.