VA Loans for a Farm: Everything You Need To Know

Most Veterans and military personnel are aware of the opportunity to use a VA loan to purchase a home with no down payment, competitive interest rates and flexible financial requirements. However, if you're a Veteran looking for a loan to purchase a farm, you may be wondering if you can use your VA loan benefits.

VA Loan Farm Requirements

VA farm loans follow most of the standard financial requirements, as well as property requirements.

Here’s what you need to know:

Primary Residence Required on Farm Property

The VA loan program is designed to help eligible active military personnel, Veterans and surviving spouses purchase their primary residence. For this reason, VA farm loans require the property to have a primary residence on it. This means the property cannot be primarily used for business or commercial purposes.

If you are looking to purchase land with the intent of building a home and running a farm, a VA farm loan could be a good fit for you. Another option if the farmland does not have a home on the property yet is a VA construction loan. While this complicates the process a bit, it is another option that you may want to explore.

Appraisal Only Covers Residence

Farms often have other structures on the property in addition to the primary home. This may include barns, silos, stables, corrals, work sheds, garages or storage areas. These structures are typically not considered residential and will not be included on the appraisal of the VA farm loan. This means the total amount of money a VA lender will give may not cover the costs associated with purchasing these other pieces of property.

The VA does not impose limits on the number of acres the property can have, so buying a farm with significant acreage shouldn’t be a problem.

It’s important to note that the appraisal value of the property cannot include crops, livestock, farm equipment or supplies. If the cost of the farm includes these types of assets, you’ll need to come up with additional funding on your own or apply for a separate loan in addition to your VA farm loan.

Must be an Operating Farm

In order to get approved for a VA farm loan, lenders must see farming plans, estimates of farm yield, and other income information from the farm. The VA wants to make sure you know what you're getting into, so they require lenders to confirm that you have past farming experience and/or the ability to perform the tasks of a farm operator.

In addition, it's required that a portion of your monthly income comes from your farming operations. You can use some or all of your farming income to support your loan payments.

Once you meet these specific VA farm loan requirements, the rest of the process is fairly simple. The remaining underwriting guidelines follow a path similar to purchasing a single-family home with a VA loan.

Other Eligible Property Types for VA Loans

If you’re still exploring your options, it’s important to know there are many different types of properties you can purchase using a VA loan. In addition to single-family homes, some popular options include:

• Multi-unit homes
• Condominiums
• Modular and manufactured homes
• New construction
• Barndominiums
• Tiny Homes

Explore Your Options

If you've been dreaming of living on a farm, a VA farm loan could help make your dreams come true. To learn more about your options, call 800-884-5560 to speak to one of Veteran United's loan specialists today.