Acreage and Agricultural Zoning - Underwriting Fundamentals 101

Acreage and Agricultural Zoning

When you are buying acreage style property, which is a farm or a piece of land with a house on it - or the property has a lot of features or the zoning is agricultural - you have to be very, very careful.

Usually we'll give a client a pre-approval and we say,

"You're good for this amount, okay?"

But if you're looking at a farm or something like this we have to let you know about the drawbacks and limitations that those styles of property have in terms of financing.

So what happens is it's on an acreage style zoning, most of the lenders will not factor in the full acreage.

So, for example, let's say it's a 25 acre property, most of the lenders are only going to factor in five of the acres.

There's some that will do ten and some that will do even a little bit more than ten, but they won't factor in the whole thing.

Alternatively we can run it like it's a farm.

And then based on the amount of cropping and type of animals and stuff like that could be on the farm, that will determine your maximum loan to value.

So pretty much, if it's over five acres, you can expect to put down more than 20% down.

So you need to be aware of this so that you can properly save to buy an acreage style property successfully.

Talk to a Mortgage Professional

If you are trying to buy an acreage style property, there are plenty of additional things that go into your purchase.

That is why we want to offer you a free strategy call to help prepare you for your next real estate purchase.

So then, by working with us acreage style properties are no longer a distant dream, but a fully-financeable reality.

To book your strategy call today, simply click the link below.

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