Loans for service members and veterans seeking to buy farms have been part of VA’s loan-guaranty system since its inception in the 1940s. And farming remains the post-service career of choice for some veterans, with an uptick in interest recently, per the Agriculture Department.
Veterans who want to work their own patch of land may be able to buy one with VA assistance, and there’s no limit to the amount of acreage they can purchase. But some conditions apply:
Residential first. As with all aspects of the VA-backed loan program, farm loans are targeted at service members who plan to use the land as a primary residence. Loans that cover “the nonresidential value of farm land in excess of the homesite” won’t be covered, per the VA’s Lenders Handbook.
Like any National Guard member, Brenda Dutcher faces a balancing act as she manages her job and her military commitment. But for Dutcher, it’s a family affair.
Valuation 101. VA will consider nonresidential structures (barns and silos, for instance) at fair market value as part of the valuation process. However, livestock, crops and farm equipment won’t be factored in.
Experience wanted. Veterans who plan to work the land must show VA that they know what they’re signing up for. VA outlines this process to prospective lenders, who must seek a variety of farming plans, estimates of farm yield, and other income-tracking figures, some dating back three years or more.
Veterans seeking assistance for the nonresidential end of farming operations may have other federal resources to consider. The Farm Services Agency’s Beginning Farmers and Ranchers Loans program offers direct and guaranteed loan options, and some veterans may qualify for microloan programs directed at disadvantaged or minority groups.
Learn more about the Agriculture Department’s offerings for veterans here.