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#2185890 - 07/18/18 04:46 PM Re: Agricultural Loans cowgirlsrule
David Dickinson Offline
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Some types of farming require lots of acres (i.e. row crops, cattle grazing), but some require very little land use (i.e. pigs, chickens). Likewise, some people have very large lots (i.e. 20 acres for a few horses or they have a pond). That doesn't make these a farm. They simply have a large lot.
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#2185894 - 07/18/18 04:52 PM Re: Agricultural Loans cowgirlsrule
RR Joker Offline
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10 - 15 acres will likely not support a true ag purpose for

"or as pasture for livestock" [unless maybe goats]

That typically only supports hobby's such as personal horses and maybe a cow or 2.
Last edited by RR Joker; 07/18/18 04:53 PM.
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#2185895 - 07/18/18 04:54 PM Re: Agricultural Loans cowgirlsrule
RR Joker Offline
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Oops...got sidetracked and David already covered it smile
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#2185902 - 07/18/18 05:31 PM Re: Agricultural Loans cowgirlsrule
raitchjay Offline
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How is owning a cow or 2 not an agricultural pursuit? I'm not saying that a loan secured by 20 acres and your home on which you run 2 cows is automatically an ag. purpose loan, but any loan to primarily support your 2 cow operation is.
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#2185906 - 07/18/18 05:34 PM Re: Agricultural Loans cowgirlsrule
RR Joker Offline
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If I have to borrower money to support 2 cows I'm in trouble. And no way would I call it primarily ag property. Sorry. Nope. Daisy and Jeremiah are likely pets....at least around here smile

ETA: That's about like saying a loan for my tractor [not a baby tractor by any stretch] and to support my 3 horses is ag. Nope...it's not.
Last edited by RR Joker; 07/18/18 05:35 PM.
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#2185907 - 07/18/18 05:35 PM Re: Agricultural Loans cowgirlsrule
raitchjay Offline
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Just for the record...i realize we're in the HMDA forum and not a Reg. Z one.....and i also realize we have had this discussion before (i'm looking at you Joker...:) )......but i'm still of the belief that from a Reg. Z standpoint, a loan to purchase a hoe to hoe your 5 row garden is an ag. purpose loan.
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#2185909 - 07/18/18 05:36 PM Re: Agricultural Loans RR Joker
raitchjay Offline
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Originally Posted By RR Joker
If I have to borrower money to support 2 cows I'm in trouble. And no way would I call it primarily ag property. Sorry. Nope. Daisy and Jeremiah are likely pets....at least around here smile


Like i said...i'm not saying a loan secured by 20 acres, your home, and 2 cows is primarily ag. property.
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#2185911 - 07/18/18 05:37 PM Re: Agricultural Loans cowgirlsrule
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It depends on what you're using your tractor for...if you're using your tractor for "the planting, propagating, nurturing, harvesting, catching, storing, exhibiting, marketing, transporting, processing, or manufacturing of food, beverages (including alcoholic beverages), flowers, trees, livestock, poultry, bees, wildlife, fish, or shellfish by a natural person engaged in farming, fishing, or growing crops, flowers, trees, livestock, poultry, bees, or wildlife"

then it is.
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#2185912 - 07/18/18 05:39 PM Re: Agricultural Loans cowgirlsrule
RR Joker Offline
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::stares::
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#2185913 - 07/18/18 05:40 PM Re: Agricultural Loans cowgirlsrule
RR Joker Offline
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To me...this right here is the 'catch' that usually 'fails'.

by a natural person engaged in farming, fishing, or growing crops, flowers, trees, livestock, poultry, bees, or wildlife"

a 5 row veggie garden does not equate to 'growing crops'. Neither do my gardens equate to 'flowers' as the intent is resale - ie, nursery.
Last edited by RR Joker; 07/18/18 05:42 PM.
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#2185914 - 07/18/18 05:41 PM Re: Agricultural Loans cowgirlsrule
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How does it fail? If i own 2 cows (or pigs, or chickens, or goats) am i not engaged in "growing....livestock" (or "poultry")?
Last edited by raitchjay; 07/18/18 05:42 PM.
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#2185915 - 07/18/18 05:42 PM Re: Agricultural Loans cowgirlsrule
David Dickinson Offline
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All of this is subjective. I can buy a "farm" and not use it as a farm. Someone could buy what appears to be a non-farm and use it for farming purposes. Loan officers need to know what's happening and then classify it one way or the other.

Personally, I don't believe 2 cows is farming. They are probably beef for the dinner table. Same with a few chickens. A horse or two is probably a pet. I've seen "large lots" of 30-40 acres that have no farming operations (or at least primarily). The owners just don't want anyone too close to them and they can afford it. Or they like to deer hunt and have the woods/fields by their house. "Harvesting" deer is not farming. smile

IOW, someone needs to do a sight inspection, discuss it with the borrower and then classify it. Be sure to document why you classified it the way you did and then stand your ground if it is questioned.
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#2185916 - 07/18/18 05:43 PM Re: Agricultural Loans cowgirlsrule
RR Joker Offline
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Agree 125%
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#2185918 - 07/18/18 05:47 PM Re: Agricultural Loans cowgirlsrule
raitchjay Offline
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I agree too that hunting deer isn't farming. smile
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#2185923 - 07/18/18 05:52 PM Re: Agricultural Loans cowgirlsrule
Dan Persfull Online
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If they are engaged in farming I would be looking for their Schedule F for supporting documentation.
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#2185925 - 07/18/18 06:04 PM Re: Agricultural Loans cowgirlsrule
RR Joker Offline
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Great added point, Dan!
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#2185927 - 07/18/18 06:05 PM Re: Agricultural Loans cowgirlsrule
raitchjay Offline
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I see nothing in Z that says an agricultural pursuit must be profitable...or even an attempt at making money.
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#2185930 - 07/18/18 06:15 PM Re: Agricultural Loans cowgirlsrule
RR Joker Offline
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Consider you have to properly record classifications into your CALL report. I would not consider putting a loan into the ag bucket that is not clearly ag. To me, this far outweighs Reg Z and is what typically controls my thoughts on agri purposes and farm land.
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#2185932 - 07/18/18 06:16 PM Re: Agricultural Loans cowgirlsrule
raitchjay Offline
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I wouldn't either.....but i don't know how a loan to further the growing of crops or livestock isn't "clearly ag.".
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#2185933 - 07/18/18 06:18 PM Re: Agricultural Loans cowgirlsrule
bOaty Offline
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We do look for a schedule F to be sure they are actually farming. Sometimes the income on the F is pretty small but then again maybe they didn't make a lot of money that year, it doesn't mean they aren't farming.

We know if it's a farm or not if it's a commercial loan but if it's a mortgage or a HELOC we don't. Our footprint is too big for someone to run out there and do a site inspection on those so we look at Google and get an aerial view of the property. It's usually pretty evident if there are crops there but the maps aren't always up to date.
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#2186119 - 07/19/18 06:36 PM Re: Agricultural Loans cowgirlsrule
RR Joker Offline
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Shoot...farms reporting a loss aren't that uncommon either...js.
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#2186156 - 07/19/18 08:01 PM Re: Agricultural Loans cowgirlsrule
David Dickinson Offline
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Central City, NE
As bOatry points out, Schedule F isn't only filed for farms with profit. If they have a Schedule F, it means they consider themselves to have farm operations. That still doesn't mean the property is used primarily for farming. It's one tool to use to access the situation.
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#2189065 - 08/14/18 06:44 PM Re: Agricultural Loans cowgirlsrule
KelliD Offline
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I'm looking at a loan in which the collateral is rental property, purpose of loan is to purchase land and eventually add it to the homestead and get an ag exemption. Is it HMDA reportable since its not ag exempt at this time? I can see it both ways. What say ye?

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#2189071 - 08/14/18 06:49 PM Re: Agricultural Loans cowgirlsrule
David Dickinson Offline
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Central City, NE
We need clarification:
You say the collateral is rental property. Do you mean a rental house?
Is there a house on the ag property being purchase? If so, is the house/land used primarily for ag purposes?
I'm confused by the "eventually add it to the homestead" comment. What do they currently have and what will they have if the loan is made?

If they are buying a rental house on land that is primarily used for ag purposes, I'd say the loan is exempt from HMDA reporting (as well as any loan secured by this property). The ag exemption says to not report any loan secured by a dwelling located on a farm.
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#2189074 - 08/14/18 06:54 PM Re: Agricultural Loans cowgirlsrule
KelliD Offline
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Rental house is used as collateral which makes it a HMDA reportable loan. Proceeds of the loan are being used to purchase land only which does not have a home on it or is currently being used for agricultural purposes.

Customer plans to get an ag exemption on the land at a later date. They will combine the land with personal home for the ag exempt status which may be irrelevant.

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