ot: purchasing farm

Howdy,

I'm in the process of looking around my area for a farm where my wife to be and I can reside after we get married in July. I've seen a few articles in farm magazines about young farmer loan programs, etc. We aren't hurting for money but I thought that if something like this was effective and could save us money it would be a good idea. Anyone have any info or ideas about this? Any advice is much appreciated. I've always been one that takes what the Bible says about having many advisors (being a wise thing)seriously so I look forward to hearing from ya. Thanks in advance and God bless.

--old fashioned farmer

The only national program Im aware of is the FSA/FmHA young farmer loan program. Its fairly burdensome in record keeping and paper work but may be the opportunity you are looking for.

Go to your county Farm Service Agency and talk to their loan officer about beginning farmer loan programs. Lots of extra paperwork, and takes time(you are dealing with the Fed. Govt.) but it is worth it if you qualify.

I can't help with advice with the young farmer loan program. Don't know anything about that.

However, I would like to say that I think your on the right track investing in land. About 4 1/2 years ago my wife and I purchased a 65 acre "Hobby Farm." It's nice property. Are we sorry?....nope. In my opinion, nice property is one of the best investments. You can play on it, build your home in the middle and use it for seclusion, hunt, build sheds, barns, or whatever. Ya can't enjoy a CD like that. Good luck and congrads to you and your fiance (spelling?).

Nate

The record keeping is not bad, all they have ever needed from me is a yearly balance sheet. They also will do a farm visit/inspection for the first 3 years. But the paperwork when applying is what can be overwhelming.

FSA is for starts and works. Operated on other peoples monies when possible. Now the swing side to the fed loan agencies is everything you own is listed on the the gov paper work and inspection each year to see what you have setting around so keep the new boat and etc. out of site. Saw a excellent JD collection that was off site when forclosed that was later sold by the owner.
Land is better that stocks.

i got some young farmer fsa mone but I think the cap was $200000 for land and $200000 for livestock.I still had to get the rest from a bank but fsa gave a guarantee to the bank an it is a 5 percent fixed loan.be prepared for alot of cash flow and finance paperwork when dealing with fsa.

I by all means encourage you to look to look at wide number of options for financing. One thing to consider with FSA is you may not qualify by their means testing. The original intention of "beginning farmer" was to help those get started that had absolutely no other financial means to get started. Years ago part of the test was to apply to other lenders and be turned down (I think by at least 3). Do not be afraid to talk to conventional lenders even in these times.
Being free of government money means being free to pursue whatever enterprise fits your goals without restriction. Not to say you're free to run in an irresponsible manner. With the shape the federal gov't is in, if you did get a FSA loan, can you count on the gov't not to want to get out of it and either sell or call your loan in.
Never be afraid to see if the selling owner has the ability/desire to help finance. Use a lawyer qualified to write up an arrangement to protect your interests and eliminate surprises.
Just remember you might be buying at a point where farmland might be at a decades high peak. Might want to think about any problems that might arise if your farm value slides 30, 40, or 50% or more. Would something like that erase a good portion of your equity? Some lenders are weak on support during prolonged lean times (if you had to seek refinancing) and you would hate to take drastic measures to solve a problem.
Just somethings to consider and wish you success on this.

A note about Farm Credit. I applied for a loan there years ago and reading the fine print it said "the loan can be called at any time for any reason". I said no thanks to that. I found out from other farmers that FC had done just that to numerous good operators who were current with their payments. Just the investment climate changed and they wanted their money back to invest elsewhere.

Go talk to your local FSA office I have a begining farmer loan lots of paper work cashflows and balance sheets to get teh loan have to fill out balance sheet every year any good bank wants that info the loan is a 50/50 loan with another lending institution I used FCS at the time there interest was the best and locked in for the life of the loan interest and collateral are the two things that the begining farmer loan help with I had to prove through cash flows and past records of the farm I was buying that it would pay for itself of course this was a full time venture and was gonna be my only source of income I dont knwo where you are but talk to the loan officer at FSA in that area ours is actually in the next county he covers 4 or 5 counties

While in college business class the point was made that virtually all lenders have that clause. The scenario we face now was brought up in the mid 1980's and that clause might be used to force a wide segment of borrowers out of their relatively low rates into much higher rates to keep the lenders afloat.

I bought a farm a year ago with the FSA beggining farmer loan. It's a good deal but there are head aches. Like the others said, my folder with them for a 56 acre farm is over 2" thick, no joke. They come by every year and look things over. Biggest deal I had with them was it took 10 months to get the money. Farm was owned by an estate and the cousin in St Louis or some where did not get some of the paper work back on time and I had to wait till they had money again.

Good luck,

Dave

jus tone other thing if you are serious start enquiring now because when the program runs out of money you either have to find another source what for USDA to revise some money or go with out tis happened on mine by the time we got thru all the paper work the money was used up took 4 months started in December was ready to close in March had to wait until mid april for reallocation of funds they had allocated so much for minorities and none was used by the minorities so FSA reallocated it for all people to use

My son just signed a contract Wed on 120 and is going throught the FSA 1st time farmer program. He didn't seem to think the paperwork was all that bad, but then he is also working on his MBA.

I think filling out the owners registration card for a new rifle is too much paperwork so what do I know.


Gene

My advice is, never by from a relative....