Buying a Farm
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As you begin your quest to follow your passion for farming, consider the items below. (Finding Farmland is an additional resource you might find beneficial.)
1. WHY do you want to buy a farm? Are you interested in farming as your livelihood or just as a lifestyle? Might it be better for your farm enterprise to lease farmland instead of purchasing farmland? Though it might be a bit dated, this easy to read resource from ATTRA entitled Finding Land to Farm: Six Ways to Secure Farmland offers a quick overview.
2. WHERE do you want to buy a farm? What counties and zip codes offer you the location where you want to farm to be close to family, work, or markets?
3. HOW MANY ACRES do you want to purchase? This depends on whether you want a small lifestyle ‘farmette’ for family use only, a direct to consumer vegetable or flower farm, a grass based cattle farm, or a wholesale or commodity oriented row crop farm.
4. WHAT ARE YOUR FINANCIAL RESOURCES? What you could pay for a mortgage payment for the next 15 to 30 years! Remember that buying the land is only part of your farming dream and farm improvements such as a farmhouse, barns, and other infrastructure must also be considered as you budget your farming operation.
PURCHASING & FINANCING OPTIONS
‘Fee simple’ is the most common method of purchase that usually involves full payment to the seller at ‘closing’, when legal documents are signed and transfer is official. Usually, the buyer also signs documents on a 10, 15, or 30 year mortgage. Get a sense for cost of farmland from Carolina Farm Credit’s 2021 Real Estate
Other mechanisms involved with purchasing can be Lease to Purchase, Option to Purchase, and Right of First Refusal.
Mortgages are available from a variety of sources, but the Farm Credit of North Carolina network regularly works with new and transitioning farmers. The USDA Farm Services Agency offers microloans that can be used towards a down payment for purchasing farmland; Applicants must have at least 3 years of farm experience, though 1 years of experience can be substituted by 16 semester hours post-secondary agriculture education, significant management experience, or military leadership or management experience.
Other innovative farm financing options may become available to North Carolina Farm Seekers in the future, including Dirt Capital, Iroquois Valley, Mad Agriculture Perennial Fund, and Steward. In addition, you can consider supporting efforts to establish a North Carolina Community Development Financial Institution (CDFI) focused on enhancing new and transitioning farmers similar to the one operated by California Farmlink.
The National Young Farmers Coalition created a Finding Farmland Calculator that can help farm seekers explore methods to finance their farm purchase. Be sure to check out the videos series on this tool, beginning with Finding Farmland Calculator Walkthrough: Introduction.