The current terrain in the lending world is different then what we have seen in the recent past. I recently put together a program on the current state of Ag. Lending and it would appear that the number of players in this market may be tightening even further and that the level of information required may be higher than in the past.
On the flip side of that I keep hearing people say that money is too hard to get. DON’T LISTEN. The money is also cheap. It may be difficult to get financing if you have an income source that has been greatly impacted by the recession (one example would be in the Construction industry) and this does not mean that you should not try. Just realize that if you have been building 85 houses a year and now you are down to two, this may affect your ability to repay debts in the banks opinion.
For most people the biggest change is that the down payment may be larger than in the past. The industry is returning to cash flow and down payment lending.
Generally to help the process go easily you will need:
- Contract to purchase and legal description of the property to be purchased
- Last three years tax returns
- If self employed a current profit and loss as of year to date and financial statement
- Plan for down payment and verification of these funds (copy of bank statement, etc)
- If you are using property you already own for a down payment then you would need the legal description and copy of your deed for that property as well
- Verification of major assets and liabilities (bank and 401k or stock account statements
- Verification of current employment (last pay stub)
- General information to complete an application (name, social security number, etc. )
- THE LAST AND MOST IMPORTANT THING OF ALL TO REMEMBER WHEN LOOKING AT FINANCING. CALL US. WE WILL BE GLAD TO FILL OUT THE FORMS FOR YOU IN OUR OFFICE AND HELP YOU THROUGH THE PROCESS. IT’S OUR JOB.
The Federal Land Banks have been in operation for over 90 years. We have seen tough times before. Our Senior management lived through the 1980’s as loan officers with this organization and have trained the rest of our people. If you are looking at purchasing and managing large acreage property it is a good investment from a business and lifestyle standpoint and we want to work to make the process as smooth as possible.
I have been through the process of purchasing rural properties myself and understand the challenges you feel you are facing. Give us a call. You can contact Jim Tollison at: (888) 305-0098 or by email at: Jimmy.Tollison@farmcreditbank.comThe Federal Land Bank of North Alabama can be found at: www.AlabamaLandBank.com.
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Cash flow and income are huge right now. The purchase has to make sense and basing a purchase price on income potential makes sense.
We also spend a good bit of effort supporting the value of the properties whether it is from a timber aspect, recreational use, or improvements that have been made by the current owner. This seems to help the lender with some comfort levels. Some would say that is not part of the ‘job’, but we’re all in this together!