We currently own 2.75 acres with a singlewide mobile home on the property, and a $54000 mortgage balance. We would like to build a home on the property. Does USDA do a new construction loan for rural development? I have read through the literature but have found it confusing. I think you have to prove you lack suitable housing. Not sure if we could do that.
We also have a dairy farm on the property. I thought I read no income producing properties can go through USDA. We have taken a loss on the farm, does that mean it is still income producing?
Any insight would be greatly appreciated.
Correct, USDA (at least the Guaranteed version) will not permit income producing properties, meaning any current land being used for agriculture or farming - dairy farm included. Not many lenders will, although if farming is common in your area the local banks should have some ideas for you, if not be willing to offer you financing.
There are USDA programs that will finance farms, and there are USDA programs that will finance rural housing like you have looked into, so I'd imagine if you contact your local USDA Direct office they may be able to put together a package deal for the farm and your future stick built home. One element might be subdividing a smaller piece of land off of the 2.75 acres for the home, and leave the remaining portion for the dairy farm. You'd need cooperation from your existing lender, or to do it simultaneously with the funding of a new loan (since then your existing lender would be paid off/wouldn't care).
http://offices.sc.egov.usda.gov/locator/app?service=action/1/StateList/0/NavBar.TextLink is the link to the USDA Direct office finder.