In my experience working with people buying hunting land who want to know how to get a hunting land loan, there are usually several motivating factors involved that vary in any given situation. However, I would say the overall theme is that land buyers are making an investment in their future.
Alabama is lucky to have many options for state-run wildlife management areas where the general public can use the property for hunting purposes. However, they are not allowed to make major changes to the infrastructure or other land improvements. Those who are fortunate enough to find the few and often inherited leases may have more control, but still have to make accommodations for the landowner. This would include moving stands and fields during the off season and dealing with a lack of easy access roads.
People here want a property that over time will be a good investment, like the return they will get on the timber, but will also have a nice recreational benefit during that time. While many people come to me interested in buying hunting land we often talk about the value property improvement can have on their land value. Most recognize that timberland and cropland are assets that they need to take care of too.
Help for First-Time Land Buyers
We have found that the interest in land loans can be seasonal. But regardless of what time of the year it is, the majority of our inquiries are from people who may have gone through the home mortgage process but are basically first-time land buyers. The “just land” concept is all new to them, and they aren’t sure about the steps needed to get approved for a rural homesite or how to get a loan for hunting land.
One of the biggest misconceptions prospective borrowers have is that their regular banking sources will be able to loan money to purchase recreational, hunting or rural homesites and acreage. Many people find that banks either aren’t able to do it, or if they do, will require a larger down payment or offer terms that could be restrictive.
Traditional home loans normally require a relatively low down payment and a standard fixed- rate 30-year mortgage. But that isn’t the case with a recreational land loan or homesite. A land loan’s terms and down payment may vary.
A typical Alabama Ag Credit land loan will involve a down payment of cash or can be in the form of unencumbered eligible property and will carry a term of between 15 and 20 years, depending on the intended use and the size of the property. The term for a rural homesite loan with smaller acreage will normally be for 15 years, while the larger agricultural, timber and hunting land purchases may be for a longer period.
Alabama Ag Credit has nine locations serving 40 counties in central and south Alabama. We provide a full array of financial instruments for farm, timber and forestry operations, rural real estate, agribusiness and recreational property. That includes assistance in buying hunting land with a hunting land loan.
The Cooperative Advantage
Alabama Ag Credit is affiliated with the over 100-year-old nationwide Farm Credit System and we are a stockholder owned cooperative. That means that when you obtain a loan with Alabama Ag Credit you become a stockholder of the association and a portion of those earnings is returned to you through our patronage program, as determined by our board of directors.
At closing you make a one-time Alabama Ag Credit stock purchase — and that stock ownership entitles you to share in the co-op profits, lowering your loan’s total interest cost. When your loan is paid off, the cost of the stock is refunded to you.
Alabama Ag Credit doesn’t sell its loans on the secondary market like a lot of other financial institutions. When you have a 20-year loan with Alabama Ag Credit, we own your loan for 20 years and we’re going to take that risk for the complete term. Your loan stays with us.
Terms of a hunting land loan, such as interest rate and down payment, depend on the applicant’s unique underwriting factors. The size or type of the property isn’t the overriding factor.
Most recreational and hunting land loans are provided on a fixed interest rate where they can pay over time They do not want to worry about a changing or increasing interest rate and want to make sure they can keep the property in the family.
Buying Process on the Short Track
One of the most important benefits of working with Alabama Ag Credit is that once the borrower’s loan application is approved, buying hunting land moves quickly. That is because we have our own appraisers on staff and partner with attorneys and title companies in the local area where our customers are purchasing the property.
The bottom line for people who don’t know the in’s and out’s of buying hunting land, a rural homesite or land for other uses is that Alabama Ag Credit will work closely with you and walk you through all of the steps of the process.
Alabama Ag Credit is the ideal solution for folks looking to purchase their own land. Right now with competitive interest rates, customers are finding that buying hunting land is more affordable than they imagined.
With terms that can be tailored to our customer’s specific needs, we can help facilitate the ownership of the land where the buys are able to facilitate personal stewardship of the property and preserve it for future generations.
As a lender we are unique in the Alabama land loan market because we provide specialized financing at competitive rates and the service that makes for successful closings. That cultivates and results in a great relationship with our stockholders.
Amanda Ryan is a relationship manager with Alabama Ag Credit (Spanish Fort, Ala.). Amanda’s role is in a lending capacity offering all products including land, rural home, rural homesite, equipment, operating and agribusiness loans. http://www.AlabamaAgCredit.com