Dollars, Dirt, and Decisions

photo from http://madamecupcake.tumblr.com

Yesterday was a full day for me - equal time spent enjoying the beautiful weather with family and time spent working toward my goal of having my own farm.

In the morning I drove up to Norwich, CT to the USDA (US Department of Agriculture) FSA (Farm Service Agency) Office.  I met with the loan provider there, who patiently explained all of their different programs and my eligibility.  Because of my degree in agriculture and 2 years of experience managing a farm, I qualify for the Beginning Farmers and Ranchers Loan Programs.  The average age of farmers in the US is nearing age 60, with not nearly enough young farmers to take on the burden of feeding our country.  This federal program is designed to assist young farmers in starting their own farm business, through purchasing and operating loans.

There were two loans programs that could make purchasing the Picturesque North Stonington Farm a reality.  The Down Payment Assistance Program loans young farmers capable of putting 5% down on the property 45% of the appraised property value.  I would need to source the other 50% of the cost from another loan agency.  The benefits of this program are 1) a very low interest rate (yesterday it was 1.5%), 2) I would pay an annual mortgage instead of monthly, which fits much better with the finances of agriculture, and 3) I would only need to put 5% down on the property, leaving more of my savings to pay for initial operating costs.

The second program is for Direct and Guaranteed Farm Ownership.  This program would lend $300,000 towards the purchase of the property.  If I am able to negotiate the price of the farm down and secure additional funding from my family, this could potentially cover the cost of the farm.  Through this program I would also pay an annual mortgage at a fixed interest rate (yesterday it was 3.75%).  After crunching the numbers for a while and factoring in off-farm income, this could be something we could reasonably afford.  We could actually own our own farm!

The program is not without challenges and logistics.  First, I need to be denied a loan through Farm Credit East (the other farm-lending program in the state).  I will also need to be investigated to be sure I don't have any hidden inheritance or wealth that would bump me from the low-income bracket (I don't think this will be a problem!).  After a full background check (into my degree and farm experience) and an appraisal and inspection of the farm and house, I would need to meet with a board to review my business plan and ten-year growth.  They are looking for details and specifics - a thorough understanding of growing practices, business management, and marketing in this area.  It's the real deal.

Being a female puts me at an advantage in the program (where young women farmers are considered socially disadvantaged).  But my experience puts me on the cusp of the program (which really looks for three years of management experience).  Should it become an issue, I may need to form an LLC with my partner K (who has 4 years of farm management experience), where I am the primary operator and own 51% of the business.

Is your head hurting yet?

Even though it's a bit of a mess of logistics, that sort of just comes with buying a farm and a house.  And I feel ready and supported enough to dive in.  The process will take several months, but between K, my family, my real estate agent, and the loan provider, I feel like we can actually make this work.  There's a lot standing in the way, but it wouldn't really be an adventure if there wasn't a challenge.  Right?  Please nod yes.

I left the meeting feeling empowered.

And when I got back home, K and my mom were there with smiles and excitement.  I've been working on this project mostly by myself (especially the past couple of weeks) and it was nice to finally share that this could be a reality.  We could get attached just enough to want it make it work.

And it was made even more real in the afternoon when I took K to see the property and the house.  I was eager to get his opinion, take a second look at everything with clear eyes (and a full heart), and to do a soil sample.  I couldn't help but smile while I was standing with a shovel in the middle of that gorgeous pasture with my partner and a handful of really dark, good feeling soil.  We could make a home for ourselves there. We both agreed.

And we even found a shortcut to my parents house on the way home!

I've got my work cut out for me.  But I don't feel rushed.  It will take time to be thorough.  I feel as though a lot of the planning specifics will come more naturally now that we have a specific spot in mind.  And our plan is just that - a plan.  There's no reason it can't change if it doesn't work out - it just needs to be good enough to get us started.

I can't help but smile today.