How to Buy Ranch Property

Ranches receive income from cattle and other livestock.

Buying a ranch or farm requires financial planning along with leg work to receive the best possible loan. Because ranches are generally sold with equipment, livestock and other considerations, finding a loan is not as easy as going to the local mortgage company. However, there are several local and government entities created specifically to providing funding to buy ranch and farm property.

Things You'll Need

• Business plan
• Loan application

Instructions

1. Write a business plan for the ranch. Include the type of ranch you are operating, such as horse or cattle, the forecast for the ranch's income and the operations procedures.

2. Create a purchase agreement or contract to purchase in writing. Include the names of the buyer(s) and seller(s) and the property location. Also include the purchase price and a list of equipment or livestock included.

3. Locate a lender that offers financing for farms or ranches. This type of financing is generally provided by the U.S. Department of Agriculture or Farm Service Agency in your area. Use the link provided by Business.gov to locate the branch closest to you.

4. Contact your state Agricultural Department regarding financing for your ranch (See Resources.) They provide borrowers with information regarding additional funding options.

5. Use a local bank for financing if there is no local FSA. Private banks may provide financing when other lenders cannot. They may have personal knowledge regarding ranching in your area. Also, they do not require an underwriter to approve a ranch loan.

6. Review loan options with the Farm Credit System. They provide financing for ranches through a network of lending institutions in several areas. They provide one-third of rural credit needed. Compare all the financing options and determine the best one.

7. Request an application from the lender you choose. Complete the required information and provide the documents requested, such as income statements, a business plan and tax returns. Lenders also require a statement of operations from the seller.

8. Complete the purchase by obtaining an appraisal and following the loan officer's guidance. Sign the required documents.

References

• University of Minnesota: Financing the Farm Operation
• Business.gov: Farm Service Agency
• Farm Credit: Welcome to the Farm Credit System

Resources

• The Samuel Roberts Noble Foundation: Things to Know Before Buying a Ranch
• State History Guide Resources: Agricultural Agencies & Departments, 50 States