Hobby Farm and Small Acreage Mortgages in Arkansas
Hobby farm vs. working farm
Mortgage underwriting distinguishes between a residence with acreage (hobby farm) and a commercial farm. For residential mortgage purposes, the property must be primarily residential with incidental agricultural use.
Acreage limits
Conventional programs typically allow up to 10-20 acres as residential. Beyond that you may need a farm loan (Farmer Mac, Farm Credit, etc.) rather than a residential mortgage.
USDA and VA
USDA has specific limits on income-producing outbuildings and land. VA typically allows more acreage than conventional, but the property must still be primarily residential.
Northwest Arkansas and the Ozarks have active hobby-farm markets — originators who have closed these deals are worth seeking out.
OPPORTUNITY
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