Mechanicsburg, PA — Horizon Farm Credit invites new and beginning farmers to apply for the JumpStart program, which provides grant funding to help new farmers establish and grow their operations.

The JumpStart grant program awards $10,000 to top applicants in the start-up phase of business and is part of the larger, comprehensive Grow Ahead program, which provides additional resources and support for those just starting out in agriculture.  This year, up to 15 JumpStart grants will be awarded.

Eligible applicants must be at least 18 years of age or older as of April 19, 2024, must have two years or less of farming experience — or be planning to begin farming within the next two years — and must reside in Horizon Farm Credit’s territory. Current Farm Credit customers and non-customers are eligible to apply.

Those meeting program requirements are encouraged to apply at horizonfc.com/jumpstart. Applications will be accepted March 1, 2024, through April 19, 2024, and there is no cost to apply.

“Supporting those seeking to make their mark in agriculture is vital to the growth and prosperity of the industry as whole,” said Tom Truitt, Horizon Farm Credit Chief Executive Officer. “Farm Credit is thrilled to help new and beginning farmers achieve their dreams by providing financial support, and the JumpStart program reinforces the Association’s commitment to delivering support for the next generation of farmers and producers.”

More information about the JumpStart grant program can be found at horizonfc.com/jumpstart, and questions can be directed to learning@horizonfc.com. To learn more about the comprehensive support Farm Credit provides to young and beginning farmers, visit horizonfc.com/growahead.

About Horizon Farm Credit 
Horizon Farm Credit is a member-owned agricultural lending cooperative, providing consistent and reliable financing and related services to full- and part-time farmers, agricultural-related businesses, and rural landowners. The Association serves 100 counties across Delaware, Pennsylvania, and parts of Maryland, Virginia, and West Virginia. The Association has more than 22,100 members and over $6.5 billion in loans outstanding. Learn more at horizonfc.com.

Once you've decided that you're ready to build your dream home, you may be wondering what to do next. Should you start looking for land, housing inspiration on Pinterest, or talking to a lender? There are many questions and resources that can be confusing, so we are here to help!

Below, you will find helpful information on how to prepare for a building project, how to research contractors/builders, construction loans with Farm Credit, and what the loan closing process entails.

Bonus: Scroll to the bottom for a free educational resource and a chance to connect with one of our lenders!

Where do I Start?

Congratulations - you're ready to build! If you don't already own land to build on, we can discuss financing the land with the construction at the same time. For this to happen, you will have to have the construction contract and blueprints ready to go up front. Or you can look into the options offered when buying land now and building later.

If you're thinking about buying land or building on land you own or have financed, reach out to our loan officers today. We can run numbers and give you an idea of what you could potentially prequalify for based on your current financial situation. This allows you to have more flexibility when working with builders to make decisions such as they type of home and finishes you would be able to afford.

Once you bought the land, you'll want to get to know potential builders to determine who you're most comfortable with. We recommend researching local companies and looking at their previous work. Start with a quick internet search or request referrals so you can speak with a client they have serviced in the past. If you have the opportunity, you may want to walk through properties they are currently building. If you're struggling with locating a builder, our team of experts can recommend someone in your local area.

We do require a licensed contractor to serve as your general contractor through the whole process, and highly recommend finding current or past projects the builder has worked on so that you can see their work firsthand and determine if it fits your needs and wants. We try our best to prepare our customers looking to build, and sometimes they are unaware of how long the process can take. We recommend working with a trusted builder to ensure you have an open and honest conversation about what you are looking to build and what expectations to have.

The cost of construction has also increased over the last few years so it may be more expensive than you are expecting. Working with a builder from the beginning helps you construct a budget, set expectations, and then discuss your options with lenders.

What to Research: Builder and Contractor Edition

Once you've identified the builder you plan to work with, it's best to be as prepared as possible for the first meeting, including developing a list of things you would like to discuss. Below are a few examples:

• What type of home are you looking to build? Stick built, modular, timber, etc.?
• Does the contract include everything for a "turnkey" construction contract or will parts of it need to be subcontracted out? Driveway, landscaping, etc.?
• Does the contract price include permits and impact fees?
• What kind of warranties do they offer?
• Do they have any referrals or testimonies that they can offer?

Doing your research ahead of time will ensure that you are working with a reliable and reputable builder. As a reminder, we do require a licensed contractor to work as your general contractor. We do not allow self-building.

Construction Loans with Farm Credit

At Farm Credit, portfolio loans are financed at 80% of the appraised value. Be sure to have a detailed contract with your builder before working with lenders because the appraiser will depend on these details to give an accurate value of the property.

Farm Credit will finance up to 80% of the overall appraised value of the property "as if" the house is already built. We are able to use any existing equity from the property to go towards the down payment. It is a good idea to have an estimate or proposal written up for the construction project. Farm Credit requires 10% of the cost of construction available for cost overruns. This can be held in cash or savings, stock or investments, gift from family or it can potentially be financed. If overages do not occur, no cash has to be spent. We do have both credit and debt to income ratio standards.

We use a program called BUILT that is interactive for the borrower, lender, and builder. It allows the general contractor to login and order inspections for draws. A draw is a payment made by the lender to the contractor for completed work. The entire process is managed through this online portal, enabling inspections to be ordered and completed faster, and allowing draws to be issued sooner. This helps ensure your build continues without delays.

Closing on a Farm Credit Construction Loan

When building on large acreage, we can account for the true value of the full acreage. Not all lenders value every acre. Land is our specialty, so we can count the value of every acre (larger acreage means more value). This will give you more equity in the property and can potentially reduce the amount of cash you need to put in for construction. Additionally, we can roll existing land loans into the construction loan for one loan on a 30-year term. We require interest only payments on funds disbursed during the 12-month construction period, which then rolls into a fully fixed mortgage with fixed payments. Use our loan calculators to calculate your payment here.

Another advantage of working with Farm Credit is that buyers will only pay closing costs when the loan initially closes, meaning there are no closing costs when the loan switches to permanent financing. This feature, referred to as a note modification, is done entirely through DocuSign, with no need for an attorney or office visit if you consent to receive your documents electronically. Farm Credit offers note modifications in place of refinances for rate purposes, lowering interest rates when they come down for a flat fee. These do not require a new title or appraisal, and no additional closing costs outside of the fee. In short, note modifications can save you time and money in the long run, when rates shift in your favor! These can be done an unlimited number of times over the life of the loan and will be advised upon by your Farm Credit lender.

As you can see, there is a lengthy process when it comes to preparing to build and we want to be there for you every step of the way. Get connected with a lender today to see how we can help you get into your dream home!

We know that the market conditions right now are less than ideal for getting a loan. This can be frustrating especially for people looking to buy for the first time or even tenured buyers looking to move to a new location or downsize for the future. As your financial lending experts, we want to provide you with insight and guidance on how to move forward in this market so you can make an informed decision. 

What are the current market trends?

Right now, the mortgage market trends across our area encompass high interest rates and low housing inventory. First time home buyers, people looking to downsize or upgrade, or buyers just looking to move locations may struggle to find properties that meet all of their expectations. With rates determined by the Federal Reserve, there is no telling to how long the market will remain this way, so you may need to get creative, think outside of the box, and perhaps venture down a path that you didn’t mean to go down at first and consider financing options or loan structures that are different than your run of the mill mortgage. 

How do you move forward? What are your options?

Given these trends, it may be hard to find your dream home right now, and it is imperative to be patient throughout the process. Taking your time and talking with a trusted lender will help set realistic expectations and goals when property shopping. Keeping an open mind and exploring all of your options may lead you to more opportunities that you did not consider at the start of your journey. Working with an experienced real estate agent that understands rural home lending is key to a smooth transaction. Working together, your lender and real estate agenda can help you understand specialized properties, appraisals, zoning, etc.

What is a note modification?

Once you finally found the property for you and are ready to consider applying for a loan, knowing the ins and outs of your loan product is key. Farm Credit offers a note modification, or rate reduction option, which means that we will honor a new interest rate if they come down after signing for your loan. Your Farm Credit lender will analyze the change before making it permanent to ensure it makes sense for you and your situation. It also means that your interest rate is locked in and can never go up again, even when rates are increasing.* Another benefit to a note modification is that is does not require refinancing or closing costs again, but instead it is changed with one flat fee. 

Trusting Farm Credit as a partner

When searching for a home, you want to connect with someone that will listen to your wants, needs, and concerns. The first step should always be to discuss your dream and what your intentions are with the home or land you are looking to buy. This can help your lender figure out the best loan product for you and the terms that are going to set you up for success. 

In longer term loans, the note modification option Farm Credit offers is a great way to save money over the years. We have specialized tools that will break down those savings when rates drop to ensure it makes the most sense for you. Farm Credit’s lending options are unique, and we boast a network of referral partners to tap into when extra financing support is needed. 

With higher rates, it can be a challenge qualifying for the home you need. Farm Credit looks at your financial statements to make sure all income is accounted for, including money earned by side jobs or overtime income. Farm Credit understands buying and selling rural properties and your local lender is ready to help you discuss your best lending options. 

As you can see, Farm Credit has your best interest (ha ha) when it comes to searching for the perfect property for you and your family. We care about your success and want you to feel supported every step of the way. Click the link below to be contacted by one of our lenders who can help you get started! 

*This applies only to fixed rate options.

As the new year unfolds, crop insurance agents throughout our footprint are gearing up to engage in discussions with producers about policy and operational adjustments for their upcoming spring crops. Annually, the Risk Management Agency introduces vital programs in various regions, necessitating clear explanations to producers to help them make informed decisions on potential policy enhancements for their operations. Amidst the evolving landscape of crop insurance programs, any changes within your operation also demand attention.

During the sales closing season, your agent seeks to identify any deviations from the prior year, such as renting, purchasing, or selling land, alterations in entity type, or changes in entity members. It is imperative for your agent to ensure that your policy accurately reflects these changes each year, safeguarding against complications in the event of a claim.

While crop insurance policies automatically renew, providing continuity in coverage, they must adapt to the dynamic nature of agricultural operations. Given the fluctuating input costs, commodity prices, and production history, an annual assessment of your policy becomes paramount. Scheduling a meeting or call with your agent is the optimal way to explore the array of options that crop insurance offers, tailoring your coverage to align with the evolving needs of your operation. 

A knowledgeable and experienced crop insurance agent is a critical component to your support network, and can play a crucial role in keeping you informed about updates in the crop insurance program, ensuring your strategy remains effective amidst the ever-changing agricultural landscape.

When you’re ready to review your policy, or learn more about how crop insurance can benefit you and your business, give us a call to speak with a member of our crop insurance team today at 888.339.3334 or click here to learn more.