Young Farmers Loans

[doubled]

It was about a year ago we started the process of a beginning farmers loan or in Iowa its called the IADA Loan- Just thinking maybe I can help others through the
process- It is complicated and we learned some rules we did not know about.  If anyone needs to ask anything give a holler.

 

[fluffer]

I would be interested in some of the stuff you found that you didn't know.  My husband and I almost started the process this year but didn't.  We may next year.

Fluffer

 

[doubled]

For example, they wont pay for a house on the property, we had to separate the house and one acre and contract the house to buy it, they only want land only,
also its really difficult to buy from a relative, you have to jump through more hoops, also the IADA might tell you that you can borrow the max but it is really up to
the banker you are using, ours put a big cabosh on alot of what we wanted, they dont like to loan for cattle either.  And it takes forever, took us 6 months to get anything
even close to being finalized.  You think you have it all done and then you end of changing alot in the end, and you MUST negotiate the interest rate with the banker and
its not near as good as advertised.

 

[oakbar]

I don't know anything about young farmer loans--I'm way too long in the tooth and opinionated to be considered young, but I do know that buying any kind of a house, acreage, etc. within a family is an absolute pain.  It took us over a year to buy a home from my parents--that was a few years ago.  By the time we got it accomplished I had heard the phrases (government requirement and "Murphy's law") so many times that I forcefully reminded the loan officer that my name was not Murphy and I had never, nor did I think I would ever be a felon, a child molester, or even a pickpocket!!  I have to admit, things moved a little faster after that!!

 

[doubled]

I don't know anything about young farmer loans--I'm way too long in the tooth and opinionated to be considered young, but I do know that buying any kind of a house, acreage, etc. within a family is an absolute pain.   It took us over a year to buy a home from my parents--that was a few years ago.   By the time we got it accomplished I had heard the phrases (government requirement and "Murphy's law") so many times that I forcefully reminded the loan officer that my name was not Murphy and I had never, nor did I think I would ever be a felon, a child molester, or even a pickpocket!!  I have to admit, things moved a little faster after that!!

I love that wish I had talked to you first. hehe
The young farmers loans are what the government pushes not as easy as they make it sound, although I will have to say Mr Harkin was a big help and very supportative.

 

[kanshow]

What interest rate are they giving?  I have to wonder if there is any reason to go with the Gov't loan with interest rates where they are at  right now.    I think you may be able to get as low as 4% on the open market... 

I worked for USDA for almost 15 years and found the hoops they have to use are just incredible - but even with all that, they have among the largest default rate. 

 

[doubled]

What interest rate are they giving?   I have to wonder if there is any reason to go with the Gov't loan with interest rates where they are at  right now.     I think you may be able to get as low as 4% on the open market...   

I worked for USDA for almost 15 years and found the hoops they have to use are just incredible - but even with all that, they have among the largest default rate.   

Right now 6% definately not as worth it as we thought, Im not sure we would do the whole thing over.

 

[kanshow]

Yeh, they advertise the low rates but you really have to work to get them..  and then it takes so long, the other interest rates have fluctuated to where they look pretty decent.   

I don't like how they used to tie EVERYTHING up into the mortgage - even if the FSA Loan was only a small percentage of the total package.  I have no idea if they still do that..  but it was a shame. 

 

[doubled]

It was worth it for my son to get started but if there had been another way we would have done it, they sure do advertise how wonderful it is, and it is definately not that.
There just is not a business program out there for young people to get started, he has more ambition than money now.  Its a shame sometimes, its good for them to struggle
but as a parent you want the best for them.  I dont believe in just giving it to them but its hard, and the cattle business especially the show cattle business is kinda
dog eat dog.

 

[kanshow]

Good Luck to your son!!    I'm sure it was worth it to get him started!

 

[KYsteer]

One of my best friends is a loan officer for the FSA.  They have many programs for young farmers.  He has loans every year from kids to buy their show prospects for that year.  I am getting ready to get one myself to buy some cattle.  I will be looking at about 4% and up to 7 year duration.

 

[doubled]

Good Luck to your son!!    I'm sure it was worth it to get him started!

Thank you I appreciate that, I can only hope the best for him and any young person out there that is just starting out, I wish everyone out there would give each and every
young person that is starting in the business a fair shake and try to take some of the business their way, wether its in the show cattle business or selling roses on the
corner each and every one of them is trying to do their best.  In the showcattle business I have learned that these new guys are gonna work really hard to please their customers,
sometimes just because its the name its not really the way to go.  My best to everyone just starting out.