Rural Mortgage

[ericrm2005]

I am having a really suprising issue. Hopefully someone on this website has some insight. My wife and I are trying to get a mortgage on a house, barn, and 21 acres. All of the acres except maybe 1 are wooded. No bank has any problem with our qualifications, however they all tell us that they can not mortgage a property zoned "ag". The crazy part of that is, almost every property outside cities here in Pennsyvania is zoned "ag". The property were looking at is not really farmable other than possibly a couple acres of garden. This simply sounds bogus to me. If nobody could mortgage "ag" zoning, how did the housands of people who live in the country get a mortgage for their homes? Has anyone else run into this problem either in pa or where you live, and how did you go about financing your property?

 

[deerefan]

I am having a really suprising issue. Hopefully someone on this website has some insight. My wife and I are trying to get a mortgage on a house, barn, and 21 acres. All of the acres except maybe 1 are wooded. No bank has any problem with our qualifications, however they all tell us that they can not mortgage a property zoned "ag". The crazy part of that is, almost every property outside cities here in Pennsyvania is zoned "ag". The property were looking at is not really farmable other than possibly a couple acres of garden. This simply sounds bogus to me. If nobody could mortgage "ag" zoning, how did the housands of people who live in the country get a mortgage for their homes? Has anyone else run into this problem either in pa or where you live, and how did you go about financing your property?

It was a real dogfight for me. I own 50 acres and a 1650 sq ft house. The land was worth more than the house. They tried to make me subdidvide it, but I would not budge. They eventually caved as I said it seems as though you are discriminating against folk who own large amounts of property. They were also trying to tell me the land has no "value" to them, eventhough it planted in pine and hardwood. I finally got my 30 year fixed, but the interest rate was slightly higher than the going rate but not enough to make me walk away. I do farm and do have livestock on some of my acreage, but at the time that did not matter to the bank. Will they let you subdivide?

 

[ericrm2005]

It was a real dogfight for me. I own 50 acres and a 1650 sq ft house. The land was worth more than the house. They tried to make me subdidvide it, but I would not budge. They eventually caved as I said it seems as though you are discriminating against folk who own large amounts of property. They were also trying to tell me the land has no "value" to them, eventhough it planted in pine and hardwood. I finally got my 30 year fixed, but the interest rate was slightly higher than the going rate but not enough to make me walk away. I do farm and do have livestock on some of my acreage, but at the time that did not matter to the bank. Will they let you subdivide?

they would probably let me subdivide, but like you, i am not interested in doing that. they then also would probably make me put 50% down on the land part of it. its the estate of a family friend were trying to purchase. the worst part is, they are selling us the land and house for basically just the price of the house. the land is just about free. the bank does not seem to care, and they are stuck on it being ag zoning.

 

[Western]

That was the first question we had thrown at us when it got to the tax es part, AG exemptions , even the Mortgage lady couldn't explain it, or likely didn't want too, but we weren't under AG so.. She did say it was fine to get AG exemption after the mortgage was finalized???? Go figure

You may check with your county tax office and see if you can get the AG suspended or deffered for a short time, may raise the taxes a bit for the period, but you'd have the mortgage.

 

[Combustix]

Since the owner is a friend have you thought about owner financing? Don't know if that would help. Also maybe rezone to timber, as that was what mine was as much like yours 20 acres mostly wooded. Zoned light timber. Though I don't live in a house I live in a shop. At least for tax purposes.

 

[ericrm2005]

Since the owner is a friend have you thought about owner financing? Don't know if that would help. Also maybe rezone to timber, as that was what mine was as much like yours 20 acres mostly wooded. Zoned light timber. Though I don't live in a house I live in a shop. At least for tax purposes.

It is actually the owners kids who have the property now. Their father died recently. They are city folk who have no interest in the country and simply want to sell the property and get their cash asap. I didnt even ask about owner financing, but knowing them I doubt it would be possible.

 

[Furu]

I am having a really suprising issue. Hopefully someone on this website has some insight. My wife and I are trying to get a mortgage on a house, barn, and 21 acres. All of the acres except maybe 1 are wooded. No bank has any problem with our qualifications, however they all tell us that they can not mortgage a property zoned "ag". The crazy part of that is, almost every property outside cities here in Pennsyvania is zoned "ag". The property were looking at is not really farmable other than possibly a couple acres of garden. This simply sounds bogus to me. If nobody could mortgage "ag" zoning, how did the housands of people who live in the country get a mortgage for their homes? Has anyone else run into this problem either in pa or where you live, and how did you go about financing your property?

Here in the PNW we have an organization called Northwest Farm Credit Services, a member of the "farm credit services" which is basically a bank. Farm Credit Administration They lend to ag folks for land, houses, crops, equipment etc. My point is look for an organization similar to this back in your neck of the woods. They have to exist as how do farm families borrow. They may be able to help.

 

[ericrm2005]

Here in the PNW we have an organization called Northwest Farm Credit Services, a member of the "farm credit services" which is basically a bank. Farm Credit Administration They lend to ag folks for land, houses, crops, equipment etc. My point is look for an organization similar to this back in your neck of the woods. They have to exist as how do farm families borrow. They may be able to help.

I have a call in right now to Ag Choice Farm Credit. Havent heard back as of yet, but hopefully that is the right avenue. Maybe in todays age banks are being way more strict(not sure), but I never heard of anyone having problems like this in the past.

 

[MacLawn]

I hope it works out for you. Whew, I never knew about that kind of thing. It has always been a dream of mine to buy about 50 - 100 acres of land, but don't think it will happen. I have a friend in GA who has bought 50 acres, no house, but I don't know how he financed it.

 

[ericrm2005]

Talked to the guy from Ag Choice, he said that he could probably stretch it to fit somehow into a conforming mortgage. Even this guy acted like this was a stretch and this was with an ag lender. If someone has trouble buying 20 acres and a house, how do farmers buy 100's of acres these days? It seems like nobody would ever finance a farm. Kind of kills my dreams of owning a full scale farm someday.