Can You Buy a Horse Farm With a VA Loan?

These days, many buyers are looking for a home with a lot of land. Additionally, some buyers are looking to buy a horse farm for sale. What many don’t realize is that you can buy a horse farm with a VA loan! This is especially important for areas like Moore County NC which is horse farm country. Furthermore, the area has a high military and Veteran population. So, VA eligible buyers that are looking to purchase a home with excess acreage plus house their horses, a VA loan is tough to beat. Potentially, no down payment, no monthly mortgage insurance that lowers the payment, and flexible guidelines make it a great option to buy a farm residence.

horse farm
VA Loan Solutions for Horse Farm Residences

So whether looking to finance a place to cohabit with your horses or you just want your own private world away from others, a VA loan is a great way to finance this dream home.

Why is it Difficult to Buy a Horse Farm?

Although in a moment you will see solutions to using a VA loan to buy a large property for horses, there are common hurdles buyers and property owners run into. For buyers, price may be a concern as homes with acreage and extra buildings could cost a lot. For instance, some horse farms have hunt box homes. These may make the property unique, yet if there are similar sales it could be possible. Next, many loan programs have acreage limitations such as a 5 or 10 acres maximum.

Even if the buyer or farm owner qualifies for a mortgage, there is the appraisal. Not only must the property appraise for enough, the appraisal must include recent sales of similar properties. Therefore, a property with 30 acres would need to be compared with other similar sized homes with similar acreage. Fortunately for VA eligible borrowers, VA appraisals typically allow the appraiser to be flexible in comp distance. Because horse farms are usually in the country and unique, similar sales could be 10, 20, or more miles away.

Finally, the upkeep of a large property must be accounted for. Not only does a horse farm or other home with acreage require extra money, but also it takes up an owner’s time and effort.

Nationwide Horse Farm Lender

Whether buying a horse farm residence in Texas, North Carolina, Kentucky, or about any state, we underwrite based on the actual VA guidelines. That means using the full acreage as long as the VA appraisal is able to support the value. Throughout the country, there are areas which are known as horse country. One such area is Moore County NC.

Buying a Horse Farm in Moore County NC

Buying and living in Moore County NC has so many advantages for active duty military and Veterans.

  • One of the lowest property tax rates in NC
  • Close to Fort Bragg
  • Many equestrian events
  • Proximity to VA services
  • Legendary golf courses
  • Abundance of large properties
  • Very popular retirement area

Why Choose Us as Your VA Lender

Russell Smith and Blue Ridge Bank are as good as it gets…Russell Smith and Blue Ridge Bank was recommended to us and it didn’t matter that we had 16 acres, we got the best rate, closing was a breeze and their entire team were wonderful to deal with. Great caring people! Nancy C, Moore County NC

So if you are looking to buy a horse farm in Moore County, there is a lot to choose from. Even though horse farms are not cheap, at least the Moore County property taxes are very low. Want to learn more about the area? Then check out the Pine Straw Magazine with unique stories along with things to do. If you love horse and golf, you have found heaven!

Within the county includes the towns of Pinehurst, Southern Pines, West End, Seven Lakes, Carthage, Whispering Pines, Vass, Pine Bluffs, and Seven Lakes.

Do not forget about the surrounding areas like Hoke County which also has horse farms.

VA Loan Guidelines for a Horse Farm Residence

In order to use a VA loan for a farm, it must be a farm residence and the VA eligible borrower must use it as a primary residence. Additionally, the VA loan is not for purchasing a business. Rather, it is designed for buying a residence. Which means a horse barn with horses, supplies, crops, and equipment may be worth $200,000 alone. But, the VA appraiser must consider only items which are permanent and give value purely as residential in nature. So, commercial value may not be given for these items. If the property is a business and being sold as such, a commercial loan loan would be a better fit.

Even though the VA appraisal does not give commercial value for the farm, items such as barns, corrals, sheds, stables, and pasture are given residential fair market value. Another helpful area includes counting farm income to qualify for a VA loan. With farming experience, a Veteran may use this income to qualify to buy or refinance the horse farm. Self employed guidelines apply in this case.

Obviously a farm usually has a lot of land and VA loans understand this area. Unlike many loans which limit acreage, VA does not!

What is the Maximum Acreage for a VA Loan?

If looking to use a no down payment VA loan to buy a home with excess acreage so you can keep your horses, many wonder about the maximum acreage allowed by VA. Actually, many lenders cap the VA loan acreage at 5 or 10 acres. Although, VA does not have an acreage limit and we follow the VA loan guidelines. Therefore, we are an excellent resource to obtain a VA loan to buy a horse farm with potentially no down payment.

Typical Horse Farm VA Loan Requirements

Certain properties have characteristics. Just like a condo has it’s master insurance policies and condo approval process, horse farms generally have certain traits. Here are a few common areas that must be addressed.

  • Termite inspection
  • Well water
  • Private roads
  • Dirt road
  • Septic tank

When the above apply, each must be addressed according to VA loan guidelines.

VA Loan Termite Inspection

If using a VA loan for a purchase or cash out refinance, usually a pest inspection is required. Basically if the area is considered a risk for termites, VA requires a passing inspection. Learn more about VA loan requirements for a pest inspection.

Well Water Requirements

Owning a horse farm means living in the country, so most families receive their drinking water via a private well. In this case, VA requires a passing well water test. Actually, it is common for horse farms to even have multiple wells for various uses. Although, only the well that provides the home’s drinking water must be tested. Therefore, a borrower looking to purchase or cash out refinance should be ready for this expense.

Horse Farm Private Road

Again, buying a farm residence means being in the country. That may mean a private road and it may even be a dirt or gravel road. First, VA loans require that the road to the property is an all weather road. An all weather road means it is easily accessible by emergency vehicles. Basically if you need a 4 wheel drive to make it down the road, it is probably not going to work.

Furthermore roads that are not state maintained are called private roads. In the case of a private road, there must be a private road maintenance agreement and VA has rules. First, the property must have access to a public road. If it is via a private road, it must be protected by a permanent easement and must be maintained by a homeowners association or private road maintenance agreement.

If there is not a recorded agreement, a new agreement may be provided and it must include the area from the property to the public road. Chapter 12 of the VA handbook actually states, “In the absence of an agreement signed by all owners… an agreement by a Veteran to accept responsibility for a disproportionate share of the road must be reasonable in regards to the distance from the subject property to the public road.”. Then, VA must approve the agreement as well. Finally, VA will not let the Veteran take sole responsibility for the maintenance of an unreasonable distance of the private road.

Horse Farms Septic Tank Rules

Like a private well, farms usually have a septic tank as a sewage system. When the VA appraiser sees there is a septic tank, he/she must ensure the distance between the drinking water source and the septic tank, lines, and drain fields are acceptable. If the appraiser notes a potential septic issue or requires an inspection for any reason, a septic inspection must be performed by a licensed plumber, septic company, or government agency.

Buy or Refinance a Horse Farm

Hopefully it is clear that a VA loan is one of the best ways to purchase a horse farm residence. If you click on the links from this article, a reader will find that there are so many other solutions besides using acreage. VA loan advantages include areas such as…

  • No loan limits – Horse farms are expensive and VA has no loan limits when the borrower has full entitlement!!!
  • Living and/or working out of state
  • Higher debt to income ratios
  • Building a home with no down payment
  • Flexible credit guidelines – We offer VA manual underwriting
  • Multiple VA loans at once
  • Deferred student loan solutions
  • and much more!

Contact us for your VA loan and share this article with others that love horse farms and other farm residences!

Russell Smith mortgage lender
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Written By: Russell Smith

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