$4 million loan on farmland


I have a question. My family is looking at a large purchase of a farm. The purchase price is about 6 Million. Comparable sales per acre in the area would make the value be conservatively around 9 mill. We are trying to get owner financing, but it is bogging down. We have always gone with our local bank before, but they are concerned with what this purchase does to our debt to asset ratio. The numbers work on the deal, but the higher debt to asset ratio pushes us up to interest rates that we consider too high. We can put into the deal approximately 25% down(1.5mill). We have experience farming ( third generation). and can see a lot of improvement potential in this purchase.

I decided to throw this out there and see what large commercial lenders can do with it. What kind of terms would I be looking at? Can I get down under 7% and 25 - 30 years?

Is there private money for this type of thing?



PS All members involved with the deal have around 800 credit scores.

are you working with a lender that specializes in ag loans? most regular banks only know how to do Fannie Mae complaint stuff and maybe some portfolio lending on commerical stuff like stores, etc.

Ag lenders usually like to go up to 70% LTV and don’t mind owner carry back too much. I think your too optimistic on your interest rate however.

Its a bit away from my normal area of REI, but have look at a few farms deals in the past so I have some exposure to how the financing looks like

how many acres?


The lender that we normally work with is very ag based. The size of this loan is why we are looking elsewhere. Even our normal lender told us that we could do better with commercial financing or using insurance companies. We had just never considered this before.


about 25,000 acres. Aproximately 19,000 farmed and 6,000 grass. There is also about 8,000 of lease land that would come with. We can get it bought for around 300 - 310 per farmed acre (The grass is thrown in). Comparable sales in the are $200 on grass and $400 on up on farmed acres.