How to Borrow Money for Rural Land

Money is available from numerous sources to purchase rural land.

Rural land has many potential uses. It might be suitable for farms, ranches, a home site, recreational property or development. Investors buy rural land to make a profit, develop a business, go hunting and fishing, or find a relaxing place to live. Borrowing money is often a prerequisite to buying rural land, and it may be more difficult to find financing for rural land than residential property. There are numerous sources of money with which to purchase rural land.

Step 1

Contact the seller of the property and ask about owner financing. With owner financing, the buyer makes a down payment and regular monthly payments to the seller. The seller carries the note and charges interest.

Step 2

Find friends, family or others who have the funds to make a private money loan. Private lenders have extra money to invest. They receive a higher interest rate on the loan compared to placing the funds in a bank or money market account.

Step 3

Contact a hard money lender. The financing is secured by the value of the real estate parcel. The interest rate for hard money loans is higher than the interest rate charged by banks or other mortgage institutions.

Step 4

Research the Farm Credit System, a network of lending cooperatives for rural land. Visit the closest Farm Credit System office. Office locations are available at

Step 5

Ask the Farm Service Agency about farm loans if the property will be used as a ranching or farming operation. The federal Farm Service Agency provides loans to beginning farmers who cannot qualify for conventional loans.

Step 6

Contact local banks, credit unions and mortgage companies. Often the mortgage institutions charge a higher interest rate and require a larger down payment for land than for residential houses.

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