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Blue Earth, MN

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Blue Earth, MN 65013
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Rural Home Financing: A Comprehensive Lender's Guide

The magnetic charm of the countryside continues to draw a diverse demographic, with more individuals and families seeking the tranquility and space that rural properties offer. This shift has opened up a new segment for lenders and appraisers specializing in non-conventional, secondary-market properties with agricultural characteristics. RuraLiving, our program dedicated to providing long-term financing for hobby farm properties, has been at the forefront of this niche market since 2013.

Who is the Rural Borrower?

We've observed a profound shift towards remote work, significantly heightening interest in rural living—a slower pace of life, increased privacy, and the dream of owning acreage— presenting an idyllic alternative to the hustle of urban life. Potential borrowers are typically not full-time farmers; they may have professions outside of agriculture but desire the lifestyle a rural property provides.

Eligibility Criteria for RuraLiving Mortgages

As professionals at the forefront of rural home financing, understanding the specific criteria that properties must meet to qualify for RuraLiving financing is essential:

  • Location and Condition: Properties should be in rural areas, in good condition, without deferred maintenance or incomplete construction.
  • Size and Agricultural Potential: Eligible properties range from approximately 5 to 160 acres, with the potential to generate at least $500 of annual agricultural income.
  • Property Value: The home value should constitute roughly 30% of the overall property value.
  • Types of Dwellings: Includes primary and secondary residences, shed homes, barndominiums, and properties with up to three dwellings.
  • Outbuildings and Livestock: Acceptable properties may have barns, stables, silos, and can host up to 50 head of farm animals.
  • Income Reporting: Borrowers with Schedule F income are eligible, indicating some level of agricultural activity.

Non-Eligible Properties

Certain properties do not fit the RuraLiving profile. Exclusions include:

  • Full-time farming operations or properties with more than 50 head of livestock.
  • Townhomes, duplexes, or planned unit developments.
  • Unique homes without comparable sales, such as dome homes.
  • Investment properties aimed at developers or investors rather than genuine rural lifestyle seekers.

Benefits for Lenders

Partnering with RuraLiving as a correspondent lender opens doors to numerous possibilities and advantages:

  • Access to a Niche Market: Provide long-term, competitive, fixed-rate mortgage solutions for rural homebuyers.
  • Business Growth: Opens up new opportunities for you and your realtor contacts to expand into a market segment with increasing demand.
  • Support and Simplicity: Receive assistance from a dedicated and experienced team, ensuring a smooth and convenient loan process.
  • Flexible Appraisal Requirements: Tailored for the unique aspects of rural properties, offering a competitive advantage.

The Strategic Edge of Knowledge

Immersing yourself in the details of rural property financing not only positions you as a vital asset to potential rural homeowners but also optimizes your financing trajectory. This adept knowledge facilitates swift loan approvals and a seamless client experience, reinforcing your role as a trusted advisor who elevates client satisfaction and loyalty.

If you’re looking to navigate the rewarding path of financing rural homes, or if you have any questions about qualifying properties and how to tailor your offerings for this vibrant market segment, reach out to the RuraLiving team at [email protected] or 507-385-4965.

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