Can I Use VA Benefits to Buy Farmland?

November 10, 2022

Eleven percent of United States agricultural producers are active duty military members or have served in the military. That’s pretty high considering that not even seven percent of Americans have military backgrounds. If you’re among the 11 percent of veterans in agriculture, you may be wondering what benefits the U.S. Department of Veterans Affairs (VA) or U.S. Department of Agriculture (USDA) can offer you to help boost your entrepreneurship and farm operation.

There are a number of grant and loan options for military veterans offered by both the federal government, private lenders and nonprofit organizations. Learn the many ways to apply for veteran farm grants whether you’re a new farmer or an experienced rancher.

USDA Grants and Cost-Shares for Veteran Farmers

The 2018 Farm Bill addresses some of the specific and unique circumstances that certain producers face. Those producers are categorized as “historically underserved” and includes socially disadvantaged farmers, new farmers and veteran farmers and ranchers. 

Who Qualifies as a Veteran Farmer?

According the USDA definition, to be qualify for as veteran farmer or rancher for USDA programs, you must:

  • have served in the United States Army, Navy, Marine Corps, Air Force, or Coast Guard, including the reserve and was released with honor, and either:
  • became a veteran within the last 10 years, or
  • qualify as a beginning farmer.

Farm Grant Benefits for Veteran Producers

The USDA Natural Resources Conservation Service (NRCS) gives veteran farmers and ranchers special preference with two conservation programs: Environmental Quality Incentives Program (EQIP) and Conservation Stewardship Program (CSP).

EQIP is a pretty competitive cost-share program. In fact, only around a third of applicants receive funding. But since qualified veterans are given preference, there's a good chance they'll receive funding with a competitive application. Not only that, but veterans can receive fifty percent of the EQIP and CSP funds up front. That’s a huge advantage since these grants are usually awarded on a reimbursement basis. 

Non-Profit Funding Options and Technical Assistance for Veteran Farmers

Federal funding options aren’t the only ones available for veteran farmers. There are other funders out there beyond the USDA that may be able to support you. One example is the Farmer Veteran Fellowship Fund. Through the Fellowship Fund, veterans can receive up to $5,000 to pay vendors or contractors that are critical to their farm business.

The Veteran Farmer Veteran Coalition (FVC) can also offer assistance to veterans who are looking to expand their reach within the agriculture industry. If you want to create a distinction in the marketplace, you can apply for a Homegrown By Heroes label to signify to consumers that your agricultural products are produced by a military veteran. The FVC also has resources to help you create a practical agricultural business plan which will come in handy as you apply for funding both public and private.

Now that we’ve delved into the realm of USDA grant programs and non-profit fellowships, let’s take a look federal loan options and other federal resources for veteran producers.

Federal Loans and Resources for Veteran Farmers and Ranchers

VA Home Loans to Start a Farm

Many producers wonder if they can take advantage of their VA mortgage benefits to buy a farm. Veteran farmers may apply for benefits from the VA that enable the purchase of a residential farm. This means that you could get a loan from the VA to purchase a farm, but only if you intend to live there full-time, too.

This is a great opportunity to get your farm started. However, there are three things to know. First, the loan will only cover residential costs. These exclude the:

  • Nonresidential value of farm land in excess of the home site
  • Barn, silo, or other outbuildings necessary to the operation of the farm, or
  • Farm equipment or livestock

So while there aren’t any acreage restrictions or requirements, you won’t be able to use this funding to purchase land for your agribusiness.

Second, you can use future projected farm income to qualify for the loan, but only if you can prove you have previous farm experience. Otherwise, you’ll need to have additional income as proof of your ability to repay the loan.

Lastly, your disability status has a major impact on your VA loan eligibility. In fact, if you qualify as 10 to 100 disabled, you’d also qualify for the VA Funding Fee exemption and ability to count disability income. Learn more about how your disability rating affects your VA home loan benefits.

It’s important to know that while the VA runs the VA Home Loan program, it’s the individual lenders who decide whether they want to take on the risk of lending you money. That means that lenders can create their own property restrictions. So if you get denied for a VA loan from one lender, you may find another lender who is willing to accept your application. 

If you’d like to learn more about this program, we recommend getting in touch with your district’s VA.

Farm Service Agency Loans

The USDA’s Farm Service Agency (FSA) offers farm loan programs to help veteran producers buy farmland or equipment and make repairs and upgrades. If you have a small farm or grow a specialty crop, the FSA Microloan program may be perfect for you. 

FarmRaise specializes in applying farmers for FSA microloans. If you’re looking for a jump start for your farm, a FarmRaise Farm Funding Advisor can personally work with you to boost your application’s chances of being accepted. Start by checking you and your operation’s eligibility for funding.

Small Business Support for Veteran Small Business Owners

The U.S. Small Business Administration supports veteran farmers through its Veterans Business Outreach Center (VBOC) program.

VBOC provides services to strengthen business skills in service members, veterans and their families - whether you’re just beginning reentry or you’re a military spouse. Some of those services are:

Growing produce or raising livestock is one thing. Running a business is another, and building the business skills necessary to run an agricultural operation is critical to your success. To take advantage of this resource, contact one of the 22 VBOC offices around the country.

Other Resources for Veteran Farmers

For those who have served, there are many NGO and non-profit initiatives that offer services to veterans.

A‍void the Paperwork

Whether you’re in a rural community or urban area - farming or ranching - there are grant programs, assistance programs and resources to help the economic development of veterans farmers and ranchers.

But you don’t have to go it alone. If you’re a veteran farmer and you want to avoid being overwhelmed by paperwork, the FarmRaise team is here to offer support in your application process and along your journey toward farm prosperity and profitability. See how our 1:1 advising and our Farm Funding Library can keep you connected to grants, loans and resources so you can get back to what’s important - farming.

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