Many people are aware that it is important to diversify your investment portfolio. For some that may mean investing in land (timberland, agricultural, recreational or maybe that old farm you have always thought about retiring to). But, how do you pay for it? Most people do not have the cash. Although interest rates on homes and land differ, there are correlations. The trends are similar but it is unusual to get as low of an interest rate for rural property as you can get for a home. The conventional banks tend to have tougher standards for land loans and usually require a higher down payment. I decided to talk to a loan officer with AgSouth Farm Credit to get the facts. Russ Stewart is located in Greenville, GA. These Farm Credit banks are located all over the state. They were formerly know as the 'Federal Land Bank'.
The Farm Credit banks will lock in fixed rate financing up to 20 years. On loans under $200,000, they will lock in a rate for 15 years with a 15% down payment + closing cost. On loans over $200,000, they will require a larger down payment. One interesting fact about these bank, they rebate approximately 25% of the interest portion of the payments at the end of the year in the form of a dividend check. Whether it’s for recreational land, timberland investment, or a combination of the two, these institutions have money available to lend.
For Information on Buying or Selling Land contact G. Kent Morris, ALC, RF at