Land Loans FAQ: How Much Will My Down Payment Be?

This edition of our FAQ Land Series covers down payments - a popular topic folks ask about after finding some property.

Q: I found 20 acres that I want to buy, how much would I need as a down payment? 

A: Typically, we require a minimum of 15% down, but that is ultimately determined by the loan term and other factors such as your credit. The longer the term, the bigger the risk, which means we need this level of commitment from you upfront.
 
AgSouth can finance up to 85% of the purchase price or the appraised value of the property, whichever value is less. That means that 15% is the minimum down payment required for this type of purchase.
 
Regional Vice President Spencer Floyd gives an example, “If you are under contract for a $100,000 purchase price, and the property appraises for $110,000, then you will be responsible for putting $15,000 down (15% of $100,000) at the time of closing, in addition to closing costs. The down payment can come from verified checking, savings, or investment accounts.”
 
Ultimately the details of your loan term and your financial situation determine the exact down payment required.

Questions?

If you’re interested in buying land in South Carolina or Georgia, one of our local loan officers would be more than happy to help. Find an AgSouth Branch near you!

Not in South Carolina or Georgia? Find your Farm Credit Association.