• Many banks treat farmland as a specialty property and commonly cap lending near 50% LTV.
• You can sometimes finance with less than 50% down by using alternative lenders, private mortgages, or a blended structure.
• Higher LTV farm loans usually require a clear exit strategy, like refinancing after improvements, selling another asset, or stabilizing income.
• Property type matters, bare land, pasture, cultivated land, and yard site can be underwritten differently.
• Private financing can be a bridge, not a life sentence, if the plan is realistic and timelines are clear.

Loan-to-value (LTV) is the percentage of a property’s value a lender is willing to finance. If a property is valued at $1,000,000 and a lender will finance $500,000, that is 50% LTV.

For farmland, banks usually reduce LTV because land is not as liquid as a city home, values can be more cyclical, and the buyer’s repayment capacity may be seasonal. Even when the land is excellent, the underwriting box is often smaller.

If you are trying to buy farmland without 50% down, the solution is usually one of these approaches. The best choice depends on your timeline, credit, income, and the property itself.

1) Blended financing (bank + private)

A blended structure combines a conventional lender at their maximum (often near 50% LTV) with a second position private mortgage to reduce the down payment needed. This can be useful when the property is strong, but the cash down is not.

2) Use equity from another property as collateral

If you own a home, rental, or other real estate with equity, you may be able to use it to support the farmland purchase. This can reduce the cash down required and sometimes improves overall pricing because the lender has more security.

• Common approach: a refinance on an existing property to raise funds for down payment
• Another approach: a lender takes additional collateral, depending on the lender’s policies

3) Short-term private financing as a bridge

Private lending can sometimes finance a higher percentage upfront, then you refinance once a milestone is hit, for example: cash flow is stabilized, the yard site is improved, a lease is signed, or an ownership transition is completed.

4) Seller participation (where possible)

In some rural deals, sellers may be open to a form of vendor take-back or structured terms. This is not always available and must be handled carefully, but it can reduce cash requirements when both parties are aligned.

This is the heart of the decision. Banks are cheaper, private lenders are more flexible. The right move is often the one that matches your timing and your next step.

Documentation varies by lender, but farmland financing usually becomes easier when you can clearly show value, marketability, and repayment plan.

Property documents

• MLS listing or purchase contract
• Legal description, title, and any known encumbrances
• Land use, zoning, access, services, and improvements
• Lease agreements, if land is rented out

Borrower documents

• ID and basic net worth statement
• Income proof: T4s, pay stubs, or self-employment documents
• If farming: farm financials, or a practical summary of operations
• Credit report details (we focus on the story and solution, not judgment)

Higher LTV and more flexible underwriting typically come with higher costs. That is not “good or bad,” it is just the trade-off. What matters is understanding it clearly before you commit.

• Interest rate: private rates are usually higher than banks
• Fees: lender fees and broker fees can apply depending on structure
• Term: many private solutions are short-term and require a planned next step
• Appraisal: rural and farmland appraisals can be more complex and take longer
• Exit pressure: if the refinance plan is unrealistic, the loan can become stressful

Example 1: Purchase with private financing, then refinance

A buyer purchases land at $1,000,000 but only has $300,000 available (30% down). A private lender funds the remainder at 70% LTV, with a 12 to 24 month plan to refinance after the buyer stabilizes income, signs a long-term lease, or completes improvements.

Example 2: Blend bank lending with a private second

A conventional lender agrees to 50% LTV ($500,000). A private lender provides a second mortgage for an additional 15% to 20%, reducing the down payment required. The second is intended to be temporary and paid out during a refinance.

Example 3: Use existing property equity to reduce cash down

A buyer refinances a home or rental property to raise down payment funds, then uses a more standard lender for the farmland portion. This approach can lower overall cost compared to a high-LTV private farm loan.