Questions You May Frequently Encounter
My customers want to purchase a farm. How much will you lend?
AGRIfinancial Services normally lends up to 70% of the approved purchase price or the appraised value of the land (whichever is less). The customer has to provide 30% in down payment (in either cash, or in the form of additional real estate pledged to support the loan). If the transaction is a refinance, or a “non arms-length” situation we will use the appraised value.
Does my customer have to farm the property to be eligible for a loan?
Producers can rent their land on a cash rent or share-crop basis and still be eligible for credit from AGRIfinancial. They simply have to generate at least $5,000 in gross farm income, whether that is from the sales of crops, or in receipts of rent.
My customer has never farmed before and wants to buy some land. Can they obtain financing from you to do that?
In most instances, we can offer first-time farmers programs to meet their needs. This sometimes includes the ability to lend as much as 100% of the purchases price in conjunction with a direct loan from the FSA (Farm Services Agency). However, if a FSA guarantee loan is being considered, the customer has to have had some farming experience.
Are there minimum and maximum loan amounts?
There are no arbitrarily imposed minimum nor maximum size loans. Each loan is developed based on the needs of the customer and his/her credit worthiness. All loans are subject to a minimum origination fee of $2,500. This could make smaller loans (under $50,000) somewhat cost prohibitive (customer choice).
What types of repayment plans are offered?
AGRIfinancial provides flexibility for all types of farmers based on the frequency of their cash flow. Grain farmers may prefer annual or semi-annual payments while livestock and other producers like the frequency offered by monthly or quarterly payments. Annual payments are due January 1; semi-annual payments are due January 1 and July 1. Monthly payments are due the 1st of each month.
Can my customer order their own appraisal? Can you use an already completed appraisal?
In order for an appraisal to be accepted, AGRIfinancial must have engaged the performing appraiser. Or, in some cases, it would acceptable to have an appraisal (signed by the original client – which would have to be a bank or other lender). The property owners or the DS Agent cannot engage the appraiser. This process provides for an independent appraisal that will be necessary to support your loan.
My customer would like to pay off other debts in addition to refinancing their real estate loan; can that be done with a loan from AFS?
We can help them by consolidating debt. However, we are generally limited to not more than 25% cash-out.That means only 25% of the total loan proceeds can pay non real estate debt such as credit cards and equipment debt. There are other programs at AGRIfinancial that might offer ways to obtain higher cash-out amounts.
Can you provide my customer with a loan that will enable him to settle a bankruptcy proceeding?
Not if it is a recent occurrence. A bankruptcy ruling must have been discharged for at least 4 years. After that time, AGRIfinancial would accept an application for credit.
How long will it take to close a loan?
After a complete loan package and credit approval (excluding the appraisal) is obtained, a 45-60 day period is normal to finalize a loan closing. Time requirements by appraisers and title companies can often affect closing time of the loan. AGRIfinancial will work to try to expedite a closing time as quickly as possible.
Will my customer need to visit your office to close the loan?
We work with title offices that are close to the customer’s local community to complete the loan closing and document recording processes.
Questions About Specialty Loans And Services
Do you offer loans on horse farms?
AGRIfinancial can provide financing to larger operations involved in breeding horses, but cannot generally offer loans to “stabling or boarding” facilities. In most cases, breeding operations will be located in areas of the country where there are like-kind operations. Customers are frequently looking to finance a small horse operation in conjunction with their residence property. These loans are handled through our residential group. If you have a customer needing that type of mortgage, please contact our residential group care of email@example.com
Can my customer get financing for his poultry, swine or dairy operation?
All of these enterprises are qualified farming operations that are eligible for credit. Because of their specialized, unique nature, there are sometimes credit guidelines that need to be met. For example, underwriting might require the producer to have a contract with an upstream integrator. Independent producers might have to have offsetting financial strengths if no contract integrator is present. FSA guarantees may also factor in the picture. (Page __ of this guide provides more information.)
Can my customer obtain lease financing for equipment or buildings?
AGRIfinancial provides a complete line of lease financing products that can be used for new and used farm equipment, for improvements such as irrigation, grain storage, or farm buildings and other facilities. Qualified farm producers can even obtain leases for commercial buildings. Lease programs offer tax advantages, and can preserve cash flow. Equipment leases are available up to 7 years, and building leases can provide terms out to 10 years.
How Can I Determine Whether A Customer Would Benefit From The Fsa Guarantee Program?
AGRIfinancial underwriters are trained to work with different risk profiles and understand the ways that the USDA guaranteed loan programs can help a producer. If a guarantee could be useful, the underwriters would work with your customer and his local FSA county officer to obtain a guaranteed loan.