Agricultural Financing

Farm Credit / Agricultural Lenders: Steel Building Financing Guide

Cooperative lending system serving rural and agricultural borrowers. No 'metal building stigma,' patronage dividends can reduce effective interest rate by ~1%, and they understand rural construction.

Excellent for Steel BuildingsBest for: Rural landowners and farmers building shops, barns, or barndominiums on agricultural land

Min Down Payment

15–20%

Typical Rates

5.5–7.5%

Max Term

30 years

Min Credit Score

660

Program Overview

The Farm Credit System is a nationwide network of borrower-owned cooperative lending institutions. With over 70 institutions across the country, Farm Credit is the largest source of rural real estate credit in the United States. They understand metal buildings, barndominiums, and agricultural structures — there is no 'metal building stigma' here.

How It Works

Farm Credit institutions are cooperatives — borrowers become member-owners by purchasing stock (typically $1,000). As owners, borrowers receive patronage dividends (profit-sharing) that typically return 0.5–1.0% of interest paid, effectively reducing the interest rate. Appraisers are experienced with rural properties and steel construction.

Administered By

Farm Credit Administration (FCA) — independent federal regulator

Program Types

Farm Real Estate LoansRural Home LoansConstruction LoansRural 1st Mortgage ProgramFacility/Equipment Loans

Eligibility Requirements

Credit Score

660+ (varies by institution)

Each Farm Credit institution sets its own credit requirements. Most require 660+, some may go lower with strong compensating factors.

Down Payment

15–20%

Typical range is 15–20% for real estate loans. Construction loans may require more. Varies by institution and loan type.

Income

No maximum limit

No income ceiling. Farm Credit evaluates your overall financial picture including farm income, off-farm income, and net worth.

Occupancy

Flexible

Farm Credit finances primary residences, farm buildings, shops, barns, and commercial agricultural structures. No occupancy restrictions like government programs.

Eligible Property Types

primary residencesecondary homeagriculturalcommercialmixed use

Eligible Building Types

barndominiumshopbarngaragecommercialresidential

Additional Requirements

Rural Property

Rural or agricultural connection preferred

Most Farm Credit institutions focus on rural areas and properties with agricultural use or connection. Some have expanded to serve rural communities broadly.

Stock Purchase

$1,000 typical

Borrowers must purchase cooperative stock (typically $1,000), making them member-owners. Stock is returned if you pay off or refinance away.

Agricultural Connection

Varies by institution

Some Farm Credit lenders require a direct agricultural connection. Others (like Rural 1st) serve anyone in eligible rural areas.

Step-by-Step Process

Find Your Local Farm Credit

1 day

Locate the Farm Credit institution serving your area. Use FindFarmCredit.com to search by state or county.

Multiple Farm Credit institutions may serve your area — compare them

Rural 1st serves rural homebuyers even without agricultural connection

Initial Consultation

1–3 days

Meet with a loan officer to discuss your project. Farm Credit lenders are accustomed to steel buildings and barndominiums — no need to hide your building type.

Be upfront about your steel building plans — Farm Credit understands and welcomes them

Ask about patronage dividends and what the typical annual return has been

Pre-Qualification

3–7 days

Provide financial information for the lender to assess your borrowing capacity and recommend loan products.

Include all sources of income — farm income, off-farm employment, rental income

Ask about the stock purchase requirement and how it works

Submit Application

1–2 weeks

Complete the full loan application with all required documentation, construction plans, and builder information.

Include a detailed construction budget

Farm Credit may have more flexible builder requirements than government programs

Appraisal & Underwriting

2–4 weeks

Farm Credit orders an appraisal from an appraiser experienced with rural properties and steel construction.

Farm Credit appraisers typically understand steel building values — less comp anxiety

Provide photos and specs of similar completed buildings if available

Approval & Closing

1–3 weeks

After loan committee approval, close the loan and purchase cooperative stock. Construction disbursements begin.

Review the patronage dividend history — it effectively reduces your rate

Understand the stock purchase and how it's returned when the loan is paid off

Construction & Draw Schedule

4–12 months

Construction proceeds with funds disbursed at inspection milestones. Farm Credit may offer more flexible draw schedules.

Farm Credit may be more flexible on draw schedule timing than banks

Keep detailed records and communicate regularly with your loan officer

Financial Details

Down Payment

15–20% typical for real estate. Some programs may allow 10% with strong qualifications. Construction loans may require 20–25%.

Interest Rates

5.5–7.5% depending on institution, credit score, LTV, and loan type. Fixed and variable rate options available.

Loan Terms

Up to 30 years for real estate. Construction loans typically 12–18 months with permanent financing conversion. Equipment loans 5–15 years.

Fees

Origination fees vary by institution (0.5–1%). Stock purchase of ~$1,000 required. Generally lower fees than traditional banks.

Insurance

No PMI equivalent — Farm Credit sets their own equity requirements instead. Hazard insurance required. Flood insurance if in flood zone.

Closing Costs

2–4% typical. Generally competitive with or lower than bank closing costs.

Loan Limits

No standardized limit — each institution sets their own lending authority. Can typically handle large agricultural and rural projects.

Other Costs

Patronage dividends typically return 0.5–1.0% of interest paid annually, effectively reducing your net interest rate. This is a unique benefit of the cooperative structure.

Steel Building Considerations

Farm Credit is often THE BEST financing option for steel buildings and barndominiums. As agricultural lenders, they finance metal buildings every day — shops, barns, equipment storage, and residential barndominiums. There is zero 'metal building stigma.'

Common Challenges

Higher down payment than government programs (15–20% vs 0–3.5%)
Must have rural property or agricultural connection in most cases
Stock purchase requirement adds a small upfront cost
Rates may be slightly higher than VA or USDA for the same borrower

Tips for Approval

Farm Credit appraisers understand steel construction value — be completely transparent about your building
Ask about patronage dividends — they effectively reduce your interest rate by 0.5–1.0%
Rural 1st (a Farm Credit program) serves rural homebuyers without requiring an agricultural connection
Farm Credit finances ALL steel building types: barndominiums, shops, barns, garages, commercial
No lender overlays excluding metal buildings — they welcome steel construction

Lender Advice

Farm Credit should be your first call if you're building a steel structure on rural or agricultural land. They finance more barndominiums and metal shops than any other lender category, and their appraisers actually understand the value of steel construction.

Pros & Cons

Advantages

No metal building stigma
Farm Credit finances steel buildings daily — barndominiums, shops, barns. No lender overlays excluding metal construction.
Patronage dividends
As a cooperative, Farm Credit returns profits to borrowers. Typical annual dividend reduces effective rate by 0.5–1.0%.
Experienced with rural properties
Appraisers and underwriters understand rural land, agricultural structures, and steel building values.
Flexible property types
Finances primary homes, second homes, farms, shops, barns, commercial agricultural buildings, and mixed-use properties.
Up to 30-year terms
Long-term fixed-rate options available for real estate, providing stable monthly payments.
Relationship lending
Local loan officers who know the community and understand rural lifestyle and construction.
No income limits
Unlike USDA, there are no income restrictions — successful farmers and professionals welcome.
Member ownership
As a cooperative member-owner, you have a voice in the institution and benefit from its profitability.

Disadvantages

Higher down payment required
15–20% down is typical — significantly more than USDA (0%) or FHA (3.5%).
Rural/agricultural focus
Most institutions require a rural property or agricultural connection — not available for urban properties.
Stock purchase required
$1,000 cooperative stock purchase is required at closing. Returned when loan is paid off.
Rates may be slightly higher
Posted rates may be higher than government programs, though patronage dividends offset this.
Not available everywhere
Coverage areas vary — some regions have limited Farm Credit presence.
Variable underwriting standards
Each institution sets its own criteria — what works at one may not work at another.
Less brand recognition
Many borrowers don't know Farm Credit exists, so fewer online resources and reviews.

Common Pitfalls

Not asking about patronage dividends

Many borrowers compare Farm Credit's posted rate to other lenders without factoring in the patronage dividend, making Farm Credit look more expensive than it actually is.

How to avoid: Always ask what the average patronage dividend has been over the past 3–5 years. Subtract that from the posted rate for a true comparison.

Assuming you need a farm to qualify

Many borrowers think Farm Credit only serves farmers, when several programs (like Rural 1st) serve anyone in eligible rural areas.

How to avoid: Ask specifically about rural home loan programs and Rural 1st. Many Farm Credit institutions have broadened their eligibility beyond traditional farming.

Not comparing multiple Farm Credit institutions

Multiple Farm Credit institutions may serve your area, each with different rates, terms, and eligibility criteria.

How to avoid: Use FindFarmCredit.com to identify all institutions serving your area. Contact at least 2–3 for quotes and comparison.

Forgetting the stock purchase requirement

The ~$1,000 cooperative stock purchase is a closing cost that catches some borrowers off guard.

How to avoid: Budget for the stock purchase from the start. Remember — the stock is returned to you when the loan is paid off, so it's more like a deposit than a fee.

Required Documents

Government-issued photo IDRequired

Valid driver's license, passport, or state ID for all borrowers

Income documentationRequired

Pay stubs, W-2s, tax returns (2–3 years). For farm income: Schedule F, farm financial statements

Bank & investment statementsRequired

Most recent 2–3 months of all accounts

Farm financial statementsOptional

Balance sheet and income statement if agricultural borrower

Construction plans & specificationsRequired

Complete building plans with specifications. Engineer stamp preferred but not always required.

Builder contractRequired

Signed contract with cost breakdown. Farm Credit may have more flexible builder requirements.

Land documentationRequired

Deed, survey, and legal description of the property

Property tax recordsRequired

Current property tax statements for the land

Insurance documentationRequired

Proof of hazard insurance on the property. Flood insurance if applicable.

Entity documents (if applicable)Optional

If borrowing through a farm LLC or trust, provide formation documents and operating agreements

Frequently Asked Questions

What is the Farm Credit System?

Farm Credit is a nationwide network of cooperatively owned lending institutions, regulated by the Farm Credit Administration (FCA). It's the largest source of rural real estate credit in the U.S., with over 70 institutions serving all 50 states.

Can Farm Credit finance a barndominium?

Absolutely — Farm Credit is one of the BEST options for barndominiums. They finance metal buildings daily and have no lender overlays excluding steel construction. Their appraisers understand steel building values.

What are patronage dividends?

As a cooperative, Farm Credit shares its profits with member-borrowers. Each year, a portion of interest you paid is returned as a cash dividend — typically 0.5–1.0% of interest paid. This effectively reduces your net interest rate.

Do I need to be a farmer to qualify?

Not necessarily. While Farm Credit's roots are agricultural, many institutions now serve anyone in eligible rural areas. Programs like Rural 1st (part of Farm Credit Mid-America) specifically serve rural homebuyers regardless of agricultural involvement.

What is the stock purchase requirement?

Borrowers must purchase cooperative stock (typically $1,000), making them member-owners. This stock is returned to you when the loan is paid off or refinanced. It's more like a refundable deposit than a fee.

What types of buildings can Farm Credit finance?

Farm Credit finances virtually all steel building types: barndominiums, shops, barns, garages, equipment storage, livestock facilities, commercial agricultural buildings, and mixed-use structures. There are no categorical exclusions for metal buildings.

How do Farm Credit rates compare?

Posted rates may be slightly higher than government programs (USDA, VA), but patronage dividends typically return 0.5–1.0% of interest paid annually. After the dividend, effective rates are often competitive with or better than other options.

Can I finance land and construction together?

Yes — Farm Credit can often finance land purchase and construction in a single loan, or finance construction on land you already own. They offer flexible structuring for rural real estate transactions.

How do I find my local Farm Credit?

Visit FindFarmCredit.com or FarmCredit.com to search by state or county. Multiple institutions may serve your area — it's worth comparing 2–3 for the best terms.

What is Rural 1st?

Rural 1st is a mortgage lending program within the Farm Credit System (operated by Farm Credit Mid-America) that serves rural homebuyers. It offers competitive rates and does not require an agricultural connection — just a rural property location.

Official Sources & Resources

Verify the information above directly from these official sources. Rates, terms, and eligibility requirements change frequently — always confirm with the lender or program administrator.

Farm Credit SystemOfficial Farm Credit System website

Find Farm CreditLocate Farm Credit institutions by location

Farm Credit AdministrationFederal regulator of the Farm Credit System

Capital Farm CreditOne of the largest Farm Credit institutions (TX)

Farm Credit of the VirginiasFarm Credit serving VA, WV, and western MD

Rural 1stRural home mortgage program within Farm Credit

Farm Credit Mid-AmericaServing IN, KY, OH, and TN

USDA Farm Service Agency LoansFSA guaranteed loans — another agricultural option

In This Guide

Disclaimer: This guide is for informational purposes only and does not constitute financial, legal, or professional advice. Interest rates, loan terms, eligibility requirements, and program details change frequently. Always verify current information with the lender or program administrator before making financial decisions. Homestead Steel Structures & Design is not a lender, financial advisor, or mortgage broker. Last updated February 2026.

Ready to Finance Your Steel Building?

We help connect you with lenders experienced in steel building and barndominium financing — so you can focus on your build, not the paperwork.

Get Your Free Quote Explore Building Series

Agricultural Financing

Farm Credit / Agricultural Lenders: Steel Building Financing Guide

Cooperative lending system serving rural and agricultural borrowers. No 'metal building stigma,' patronage dividends can reduce effective interest rate by ~1%, and they understand rural construction.

Excellent for Steel BuildingsBest for: Rural landowners and farmers building shops, barns, or barndominiums on agricultural land

Min Down Payment

15–20%

Typical Rates

5.5–7.5%

Max Term

30 years

Min Credit Score

660

Program Overview

How It Works

Administered By

Farm Credit Administration (FCA) — independent federal regulator

Program Types

Farm Real Estate LoansRural Home LoansConstruction LoansRural 1st Mortgage ProgramFacility/Equipment Loans

Eligibility Requirements

Credit Score

660+ (varies by institution)

Each Farm Credit institution sets its own credit requirements. Most require 660+, some may go lower with strong compensating factors.

Down Payment

15–20%

Typical range is 15–20% for real estate loans. Construction loans may require more. Varies by institution and loan type.

Income

No maximum limit

No income ceiling. Farm Credit evaluates your overall financial picture including farm income, off-farm income, and net worth.

Occupancy

Flexible

Farm Credit finances primary residences, farm buildings, shops, barns, and commercial agricultural structures. No occupancy restrictions like government programs.

Eligible Property Types

primary residencesecondary homeagriculturalcommercialmixed use

Eligible Building Types

barndominiumshopbarngaragecommercialresidential

Additional Requirements

Rural Property

Rural or agricultural connection preferred

Most Farm Credit institutions focus on rural areas and properties with agricultural use or connection. Some have expanded to serve rural communities broadly.

Stock Purchase

$1,000 typical

Borrowers must purchase cooperative stock (typically $1,000), making them member-owners. Stock is returned if you pay off or refinance away.

Agricultural Connection

Varies by institution

Some Farm Credit lenders require a direct agricultural connection. Others (like Rural 1st) serve anyone in eligible rural areas.

Step-by-Step Process

Find Your Local Farm Credit

1 day

Locate the Farm Credit institution serving your area. Use FindFarmCredit.com to search by state or county.

Multiple Farm Credit institutions may serve your area — compare them

Rural 1st serves rural homebuyers even without agricultural connection

Initial Consultation

1–3 days

Meet with a loan officer to discuss your project. Farm Credit lenders are accustomed to steel buildings and barndominiums — no need to hide your building type.

Be upfront about your steel building plans — Farm Credit understands and welcomes them

Ask about patronage dividends and what the typical annual return has been

Pre-Qualification

3–7 days

Provide financial information for the lender to assess your borrowing capacity and recommend loan products.

Include all sources of income — farm income, off-farm employment, rental income

Ask about the stock purchase requirement and how it works

Submit Application

1–2 weeks

Complete the full loan application with all required documentation, construction plans, and builder information.

Include a detailed construction budget

Farm Credit may have more flexible builder requirements than government programs

Appraisal & Underwriting

2–4 weeks

Farm Credit orders an appraisal from an appraiser experienced with rural properties and steel construction.

Farm Credit appraisers typically understand steel building values — less comp anxiety

Provide photos and specs of similar completed buildings if available

Approval & Closing

1–3 weeks

After loan committee approval, close the loan and purchase cooperative stock. Construction disbursements begin.

Review the patronage dividend history — it effectively reduces your rate

Understand the stock purchase and how it's returned when the loan is paid off

Construction & Draw Schedule

4–12 months

Construction proceeds with funds disbursed at inspection milestones. Farm Credit may offer more flexible draw schedules.

Farm Credit may be more flexible on draw schedule timing than banks

Keep detailed records and communicate regularly with your loan officer

Financial Details

Down Payment

15–20% typical for real estate. Some programs may allow 10% with strong qualifications. Construction loans may require 20–25%.

Interest Rates

5.5–7.5% depending on institution, credit score, LTV, and loan type. Fixed and variable rate options available.

Loan Terms

Up to 30 years for real estate. Construction loans typically 12–18 months with permanent financing conversion. Equipment loans 5–15 years.

Fees

Origination fees vary by institution (0.5–1%). Stock purchase of ~$1,000 required. Generally lower fees than traditional banks.

Insurance

No PMI equivalent — Farm Credit sets their own equity requirements instead. Hazard insurance required. Flood insurance if in flood zone.

Closing Costs

2–4% typical. Generally competitive with or lower than bank closing costs.

Loan Limits

No standardized limit — each institution sets their own lending authority. Can typically handle large agricultural and rural projects.

Other Costs

Patronage dividends typically return 0.5–1.0% of interest paid annually, effectively reducing your net interest rate. This is a unique benefit of the cooperative structure.

Steel Building Considerations

Common Challenges

Higher down payment than government programs (15–20% vs 0–3.5%)
Must have rural property or agricultural connection in most cases
Stock purchase requirement adds a small upfront cost
Rates may be slightly higher than VA or USDA for the same borrower

Tips for Approval

Farm Credit appraisers understand steel construction value — be completely transparent about your building
Ask about patronage dividends — they effectively reduce your interest rate by 0.5–1.0%
Rural 1st (a Farm Credit program) serves rural homebuyers without requiring an agricultural connection
Farm Credit finances ALL steel building types: barndominiums, shops, barns, garages, commercial
No lender overlays excluding metal buildings — they welcome steel construction

Lender Advice

Pros & Cons

Advantages

No metal building stigma
Farm Credit finances steel buildings daily — barndominiums, shops, barns. No lender overlays excluding metal construction.
Patronage dividends
As a cooperative, Farm Credit returns profits to borrowers. Typical annual dividend reduces effective rate by 0.5–1.0%.
Experienced with rural properties
Appraisers and underwriters understand rural land, agricultural structures, and steel building values.
Flexible property types
Finances primary homes, second homes, farms, shops, barns, commercial agricultural buildings, and mixed-use properties.
Up to 30-year terms
Long-term fixed-rate options available for real estate, providing stable monthly payments.
Relationship lending
Local loan officers who know the community and understand rural lifestyle and construction.
No income limits
Unlike USDA, there are no income restrictions — successful farmers and professionals welcome.
Member ownership
As a cooperative member-owner, you have a voice in the institution and benefit from its profitability.

Disadvantages

Higher down payment required
15–20% down is typical — significantly more than USDA (0%) or FHA (3.5%).
Rural/agricultural focus
Most institutions require a rural property or agricultural connection — not available for urban properties.
Stock purchase required
$1,000 cooperative stock purchase is required at closing. Returned when loan is paid off.
Rates may be slightly higher
Posted rates may be higher than government programs, though patronage dividends offset this.
Not available everywhere
Coverage areas vary — some regions have limited Farm Credit presence.
Variable underwriting standards
Each institution sets its own criteria — what works at one may not work at another.
Less brand recognition
Many borrowers don't know Farm Credit exists, so fewer online resources and reviews.

Common Pitfalls

Not asking about patronage dividends

Many borrowers compare Farm Credit's posted rate to other lenders without factoring in the patronage dividend, making Farm Credit look more expensive than it actually is.

How to avoid: Always ask what the average patronage dividend has been over the past 3–5 years. Subtract that from the posted rate for a true comparison.

Assuming you need a farm to qualify

Many borrowers think Farm Credit only serves farmers, when several programs (like Rural 1st) serve anyone in eligible rural areas.

How to avoid: Ask specifically about rural home loan programs and Rural 1st. Many Farm Credit institutions have broadened their eligibility beyond traditional farming.

Not comparing multiple Farm Credit institutions

Multiple Farm Credit institutions may serve your area, each with different rates, terms, and eligibility criteria.

How to avoid: Use FindFarmCredit.com to identify all institutions serving your area. Contact at least 2–3 for quotes and comparison.

Forgetting the stock purchase requirement

The ~$1,000 cooperative stock purchase is a closing cost that catches some borrowers off guard.

How to avoid: Budget for the stock purchase from the start. Remember — the stock is returned to you when the loan is paid off, so it's more like a deposit than a fee.

Required Documents

Government-issued photo IDRequired

Valid driver's license, passport, or state ID for all borrowers

Income documentationRequired

Pay stubs, W-2s, tax returns (2–3 years). For farm income: Schedule F, farm financial statements

Bank & investment statementsRequired

Most recent 2–3 months of all accounts

Farm financial statementsOptional

Balance sheet and income statement if agricultural borrower

Construction plans & specificationsRequired

Complete building plans with specifications. Engineer stamp preferred but not always required.

Builder contractRequired

Signed contract with cost breakdown. Farm Credit may have more flexible builder requirements.

Land documentationRequired

Deed, survey, and legal description of the property

Property tax recordsRequired

Current property tax statements for the land

Insurance documentationRequired

Proof of hazard insurance on the property. Flood insurance if applicable.

Entity documents (if applicable)Optional

If borrowing through a farm LLC or trust, provide formation documents and operating agreements

Frequently Asked Questions

What is the Farm Credit System?

Can Farm Credit finance a barndominium?

What are patronage dividends?

Do I need to be a farmer to qualify?

What is the stock purchase requirement?

What types of buildings can Farm Credit finance?

How do Farm Credit rates compare?

Can I finance land and construction together?

How do I find my local Farm Credit?

Visit FindFarmCredit.com or FarmCredit.com to search by state or county. Multiple institutions may serve your area — it's worth comparing 2–3 for the best terms.

What is Rural 1st?

Official Sources & Resources

Verify the information above directly from these official sources. Rates, terms, and eligibility requirements change frequently — always confirm with the lender or program administrator.

Farm Credit SystemOfficial Farm Credit System website

Find Farm CreditLocate Farm Credit institutions by location

Farm Credit AdministrationFederal regulator of the Farm Credit System

Capital Farm CreditOne of the largest Farm Credit institutions (TX)

Farm Credit of the VirginiasFarm Credit serving VA, WV, and western MD

Rural 1stRural home mortgage program within Farm Credit

Farm Credit Mid-AmericaServing IN, KY, OH, and TN

USDA Farm Service Agency LoansFSA guaranteed loans — another agricultural option

In This Guide

Ready to Finance Your Steel Building?

We help connect you with lenders experienced in steel building and barndominium financing — so you can focus on your build, not the paperwork.

Get Your Free Quote Explore Building Series