Acreage Financing

Acreage lending is often requested in a few different formats:

• Land Only Financing:

Most financial institutions will only lend up to 50% of the land’s market value. MMG Mortgages does have access to a few lenders within Alberta who will consider financing up to a maximum of 75% of the land market value and this is predominantly in the urban city center locations, or small acreages close to the city limits. The further the lot is from a major city center, the more down payment a bank will request. This is also true for larger scale properties, agriculturally zoned properties and higher end price points.

• Land & Home Financing:

Financial Institutions prefer to finance acreage properties that are considered a smaller homestead and only used for personal or recreational use. Not for farming, animal breeding or for deriving income from the land. Those types of transactions would be concerned Farm Lending and would be subject to different qualifying criteria.

When purchasing an acreage for personal use, most lenders will only take into consideration the value of 10 acres, plus the dwelling and no consideration for the value of outbuildings.

We do however options available through more specific lenders who will finance larger scale acreages or non operating farms up to 160 acres, with taking into consideration the full appraised value of the entire quarter section, plus the dwelling and they may even consider the value of one outbuilding.

We always recommend adding special conditions to any purchase contract for well and septic testing if the properties are not on city water and sewer. This may also be a bank condition of a mortgage approval.