A hobby farm is primarily defined as a patch of farmland that is not for profit and is not a source of income and is mainly for pleasure. A hobby farm should be less than 50 acres to be classified as a hobby farm, and anything larger than that is already considered a small farm.
A hobby farm can be anything you want to grow, whether vegetables or produce, grains, animals, a vineyard, orchard, flowers, or even a coffee farm. It can be called a huge garden where you grow your own food but this is not a business venture and your income has to come from another source. Once the hobby farm becomes the primary source of income, taxes begin to apply for the farm.
If you are a hobby farmer dreaming to expand your space a little bit to grow, there are plenty of things to consider. Are you expanding your space so your house will not be affected? Are you expanding your space so you can add more crops or more animals? Are you shifting to become an organic hobby farm? Will expanding your space be classified as a small farm, and will there be taxes applicable when you spread out?
With all things considered, traditional banks do not often provide hobby farm mortgage loans since the farm is not a primary source of income and will not turn up a profit at all. Hobby farms may not qualify for any traditional loans and this is where you need to turn to other non-traditional loans in order to finance your hobby farm expansion. Credit unions might also not be an option because of the small nature of a hobby farm.
United Farm Mortgage offers different options for farm owners who need financial help. You can choose from any one of these hobby farm mortgage options:
- Part-Time Loans – A hobby farm can generate very little to no income at all and can qualify for a part-time hobby farm mortgage. If the farm generates less than $10,000 annually, then the part-time loan is perfect for you.
- Farm Loans – If the hobby farm is at a larger scale and the expansion needed is projected to be higher, taking on a farm loan as a hobby farm mortgage option is possible as long as the specifics of the farmland are declared and that this is not a profit-generating farm at all.
United Farm Mortgage works directly with farmers and agriculturalists and thus understands the difficulties and challenges of maintaining a farm. Keeping a farm, even if it is just a hobby farm, is a labor of love for a farmer or a hobbyist and is in itself a challenge. With over 35 years of experience, United Farm Mortgage can offer expert advice on what options to take for a hobby farm mortgage and what is needed to take on this loan. United Farm Mortgage aims to help farmers expand their spaces without putting too much burden on the farmers and the same goes for hobbyists who wish to expand and take on a hobby farm mortgage.
Call United Farm Mortgage and discuss with a financial expert to get assistance for your hobby farm mortgage inquiries.