Ranches for Sale in Oregon—Different Types of Loans You Can Take Out
Securing a home loan is no small feat, but getting a loan for a ranch can be an adventure in itself. If you’re considering looking at ranches for sale in Oregon, knowing about the loan options available to you will make the entire process much easier.
Down Payment Loan Assistance
A lot of potential ranch owners aren’t able to afford the initial down payment, but there are programs available for them. The Farm Service Agency (FSA) has a down payment loan for the “beginning farmer” in an amount up to 40 percent of the ranch’s purchase price or its appraised value. The loan must be repaid, and the terms give buyers a 4 percent interest rate for 15 years. Buyers have to have an additional 10 percent of the ranch’s purchase price (in cash) as their down payment. The purchase price can’t go above $250,000. With another FSA down payment program, buyers must have a cash down payment of at least 5 percent of the land’s purchase price.
Direct Farm Ownership Loans
The FSA also offers direct loans up to $300,000. The payment terms are reasonable as well. The repayment term is 40 years for direct and guaranteed farm ownership loans. These funds can be used to purchase a farm or ranch, expand existing farms or ranches, build necessary buildings (like barns or sheds), and pay closing costs. Loan funds can also be used for soil and water conservation efforts.
Land Contract Guarantee
If you’re looking to expand your current ranch with more land, then a land contract guarantee loan could be a good fit. The land’s purchase price can’t exceed $500,000, and the loan is amortized for 20 years in equal payments for the term of the guarantee (not longer than 10 years). Interest rates for this type of loan are fixed and can’t go above the current rates of the direct farm ownership loans plus an additional 3 percentage points.
Are There Any Specialized Loans?
There are various government-backed loans for ranchers and farmers. There are loans for beginning or socially disadvantaged farmers (minorities and women) that started farming or ranching within 10 years of their loan application.
A ranch for sale in Oregon or elsewhere is a huge investment–both financially and emotionally. Getting the right loan to fit your situation will ensure the purchase of your new ranch was a good decision.
Farm Loans 2014 Farm Bill Fact Sheet, United States Department of Agriculture
Your Guide to FSA Farm Loans, United States Department of Agriculture