University of Vermont

Vermont New Farmer Project Vermont New Farmer Project
Purchasing Farmland

Purchasing Farmland: An Overview

How to Finance the Purchase of Farmland

Various financial institutions throughout Vermont extend loans to farmers for the purchase of farmland. Here is a list of potential resources for loans to purchase farms or farmland:

  • Commercial Banks. Check with your local bank to see if they make agricultural loans. Compass Consulting Group maintains a list of Vermont banks on their website, with links to each bank’s website and contact information: Visit the Vermont page: http://www.compasscg.com/banking_links/vermont.html
  • The Vermont Agricultural Credit Corporation (VACC) is a non-profit division of the Vermont Economic Development Authority.  VACC makes loans to “farmers and agricultural facilities who are not having their financial needs met by conventional agricultural credit sources.” Call (802) 828-5267 or visit online at: http://www.veda.org/interior.php/pid/1/sid/100
  • Yankee Farm Credit is an agricultural credit cooperative owned and governed by its farmer customers.  Yankee makes farm ownership loans of up to 75% of the appraised property value. Call (802) 879-4700 or visit online at https://www.yankeeaca.com/ for more information.
  • USDA Farm Services Agency (FSA) loans can be excellent opportunities for farmers who are “unable to obtain financing from commercial lenders.”  FSA gives special priority to beginning farmers, as long as there is a demand from beginning farmers for the loans.  In the Downpayment Program, FSA makes direct farm ownership loans for up to 45% of the purchase price of the farm, or up to a maximum loan amount of $225,000. For the balance, FSA will partner with commercial lenders and provide a guarantee that FSA will bear up to 95% of risk of default.  This enables lenders to extend credit to beginning farmers who would be denied a loan under other circumstances.  Low interest rates, up to 4% below the normal direct farm ownership rate, also make the program attractive for beginning farmers in need of start-up assistance.  For more information on the Downpayment Program or other direct farm ownership loans, contact your local FSA office, listed in the telephone directory or online at www.fsa.usda.gov .

Last modified June 20 2013 09:45 AM