Farm Construction Loans: Build Your Dream Rural Property
Finding a move-in ready property can be challenging, especially for rural properties with larger acreages and multiple structures. Thankfully, there's a loan specifically meant to help buyers finance these improvements and turn a piece of property into their dream home. It's called a construction loan.
“A construction loan is basically going to cover anything that's going to add value to your property,” says Leigh Rodebaugh, a Compeer Financial lending officer. Here are a few things Rodebaugh recommends keeping in mind when considering a construction loan:
Work with an experienced team
When buyers are already focused on finding the right home loan, the construction loan process can seem daunting. Compeer Financial's team of experts simplifies the process. Their specialization in rural properties means they understand the unique considerations you face. Rodebaugh says, "Your loan officer can provide a comprehensive overview of the entire construction process. You'll have a trusted advisor by your side every step of the way."
Understand what construction loans can cover
Some of the most common construction loans Rodebaugh works with cover new home builds or renovations to existing homes. They can also cover things like sheds and barns.
Ashley and Carl Thalacker, for example, used a construction loan to build their dream home on their family land in southwest Wisconsin. They wanted to self-contract the work, and Compeer helped them secure an affordable loan even when traditional banks wouldn’t.
Understand construction loan limitations
While construction loans can be used for a wide variety of projects on both new and existing builds, they may not cover everything.
This can be especially true for properties that can produce income. Some lenders won’t offer construction loans for components of a property that are used for business purposes. A Compeer lending officer like Rodebaugh can refer clients to the agricultural side of the company for a loan that will cover those aspects of a property.
“If somebody is looking to put up something to raise cattle or pigs in, for example, I'm going to direct you over to one of our professionals on the ag side,” she says.
While a construction loan can’t be used for equipment, there are lending options for that, too. The Dick family took advantage of an equipment loan from Compeer when they expanded a horse stable business on their new acreage. “The hope, dream, and goal is that if you're looking to live on the farm, live in the country, do any kind of farming, or get involved in any type of ag activity, that we're able to help you on whatever scale that takes,” Rodebaugh says.
Compeer Financial is committed to helping you achieve your rural lifestyle goals, whether it's buying land, renovating a farmhouse, or starting an agricultural business. Learn more from contributing author Chad McGlothlen and the Compeer team.
*Borrowers must be current on loan obligations to qualify. Fees can vary by loan product. Terms, conditions and programs are subject to change.