Find trends and outlooks, education and more on financing rural America from Farm Credit Services of America.

More Content

How Much House Can You Really Afford?

From house hunting to financing, first-time homebuyers often have many questions about navigating the road to homeownership. It’s an undertaking that can seem even more overwhelming when moving to a farm, acreage or rural community.

These five tips from our Rural 1st® team can help you successfully finance a country home that fits both your lifestyle and budget.

Start the conversation early. Before falling in love with a property or home in the country, would-be buyers should evaluate their financial situation and explore mortgage options with a lender. Sticking to a house budget is easier when a lender is involved early and providing guidance on what a borrower can afford.

Gather up-to-date financial records. Minimum documentation for a loan application can include W-2s, tax returns and pay stubs, as well as personal and / or business balance sheets.

It’s important for homebuyers to account for all assets and liabilities when preparing their balance sheet. Listing liabilities is generally the easy part; applicants tend to overlook assets, such as a car or checking account. A properly completed loan application can reveal how debt-to-income ratios impact a homebuyer’s ability to borrow.

Avoid overextending finances. Borrowing the maximum amount possible might not be in your best interest. No lender wants to set up a borrower to fail. At Rural 1st, our goal is to help buyers achieve their goal of a dream home in the country -- within a budget that allows for, say, an unexpected car payment or fun family outings. 

As a general rule, aim for the industry’s 28/36 standard, meaning a household should spend a maximum of 28 percent of its gross monthly income on total housing expenses and no more than 36 percent on total debt. This guideline is a great way for homebuyers to calculate what they can comfortably afford without crossing their borrowing limit.

Consider the size of the property. Some lenders are hesitant to offer financing for farms and acreages they define as nonconforming properties. FCSAmerica, however, can finance any sized lot.

Large properties, those more than 40 acres, sometimes require a higher down payment and shorter loan term. But a property under that threshold is viewed as a traditional home loan product at FCSAmerica. This provides a great deal of flexibility for buyers seeking a loan that fits their needs.

Seek out the right lender. Lenders stand out from the competition by the areas they specialize in. For example, do you need a lender that is attuned to the needs of self-employed borrowers?

As an agricultural lender serving farmers and ranchers, FCSAmerica has deep and unique insights into the financial situations of the self-employed market and can use trends and averages to get loan approvals.

Click here for more information about rural home and acreage mortgages.

Rural 1st® is a tradename and Rural 1st, the Rolling Hills Window icon, Rural Logic, and Closer to What Matters are exclusive trademarks of Farm Credit Mid-America, NMLS 407249. Rural 1st products are available to consumers within the territories of participating Farm Credit System Associations.


Load more comments
Your comment has been received and is being reviewed.

Comments are moderated and reviewed before they are posted on the site. View our terms of use.


Sep 13, 2021 | Crop Insurance

Margin Protection: Risk Management for Price and Cost Changes

Margin Protection reduces risk better than any other subsidized product on the market, especially for those whose yields are consistent with or higher than the county in which they farm.

Jun 6, 2022 | The Business of Agriculture

Steps to Take Today in Rising Rate Environment

The Federal Reserve’s stance on increasing interest rates has become more hawkish. Read the latest projections for rate increases and what you can do to prepare for the impact on your cash flow.

Jan 21, 2022 | The Business of Agriculture

Optimism for U.S. Agriculture Carries Cropland Values to All-Time Highs

Year-end values in Iowa, Nebraska and South Dakota reached all-time highs in the latest benchmark farmland study from Farm Credit Services of America.

Ready to Talk?

Contact us if you have questions or need more information. Fill out the form, or connect with your local office using the Office Locator.

FCSAmerica serves farmers, ranchers, agribusinesses and rural residents in Iowa, Nebraska, South Dakota and Wyoming. For inquiries outside this geography, use the Farm Credit Association Locator  to contact your local office.