Types of Florida Farm Loans

When financing the purchase of a Florida farm for sale, one should take into account the various types of loan programs that are available. Though there are other sources of funding such as commercial banks, and state and local programs, most farm loans are supplied by the Farm Service Agency, an extension of the United States Department of Agriculture. Some of the different types of farm loans that are available to land investors for purchasing farms for sale in Florida include:

First Time Buyer Loans

First time buyer loans are sponsored by the United States Department of Agriculture (USDA). These loans are designed to promote the farming industry by offering first time farm owners a low-interest, low-fee loan option. To qualify for this type of loan, the borrower cannot currently own a farm or have previously owned one in the last 10 years.

Down Payment Ownership Loans

Down payment farm ownership loans help to foster a seamless transition of ownership from an existing farm owner to a new farming entrepreneur. This type of loan is intended to help finance the acquisition of farm land only, and is not to be used for other expenses such as supplies or materials. For new farming entrepreneurs to qualify for this loan, they must not currently own another farm and cannot have owned one in the past 10 years.

Emergency Loans

When natural disasters such as hurricanes, tornadoes, drought and flooding occur, the damage that they cause can lead to significant crop loss, and can have a detrimental impact on farmers’ revenue and lifestyle. Lenders will often grant emergency loans to farmers who have experienced the negative effects of natural disasters and are located in an area that the President or Secretary of Agriculture have declared a federal natural disaster area.

Farm Storage Facility Loans

Farm storage facility loans are designed to help farmers who own existing farms improve or expand on the facilities and structures that are used for production on the farm. This type of loan is solely to be used for the improvement or addition of facilities or structures used for the purpose of farming. It cannot be used, for example, to purchase additional farms for sale in Florida.

Farm Operating Loans

Farm operating loans (FOL) are loans that can be used by farm owners to purchase a variety of necessary items needed for the operation of the farm, and are also the most commonly financed USDA farm loan. Farmers can use this type of loan to purchase materials and supplies such as seeds or new equipment.

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