Not only are the mortgages that we provide to owners of hobby farms fast and flexible, but also very creative. As a result, this often places clients at a disadvantage when the property consists of multiple structures and vast acreage. Lenders will only use a hypothetical value of the house and 5-10 acres less any contributory value from the outbuildings and additional acreage.
The amount and purpose of funds requestedĪ typical rule of thumb with acreage exists in the mortgage industry.A description of the property and lands.If you are seeking mortgage financing to purchase or refinance a hobby farm, your mortgage lender will want to ascertain the following information: How Do Lenders Underwrite Hobby Farm Mortgages? The usual reasons for a bank mortgage decline consist of any combination of the sheer fact that the property is operating a hobby farm, the property zoning, the acreage, and the rurality of the property. We are often contacted to assist clients with sourcing financing for hobby farms due to traditional lenders’ lack of interest in approving their loan applications. A typical hobby farm might consist of a house, barn, outbuildings, and animal stables and cages. Also, the owners of a hobby farm aren’t relying nor depending on the revenue of the farm. An owner of a hobby farm typically derives their income from an unrelated career, or pension or investment income. The primary difference between a hobby farm and a working farm is that a hobby farm is operated for pleasure as opposed to generating income from the lands and farming.