This falls under, You can't make this stuff up! We have 2 loans secured by rural property to a single borrower/owner. The loans are secured by chicken houses and a rent house. The borrower needs funds to improve the equipment in the chicken houses and to redo the road that has washed away during recent rains and combine those 2 existing loans with the new funds. Total land is just under 100 acres which includes his homesite; therefore, all would fall within the 100 acre homestead inclusion.

So.......since the funds are to improve the ag portion of the property, is there any way to do this as a cash out on that part only, or , do we have to do a home equity since his home falls within the 100 acre limitations.

Home improvement loan: Why not?

Home equity loan: You would need to survey out his home and make a home equity loan secured by that...after the homeowner removes the ag exemption, if there is one on that surveyed out portion. The homeowner is precluded by law from claiming the ag exemption on the portion of the property while it is securing a home equity loan. Or you can make a home improvement loan.

Talk to your title company.

Thanks -Z-, That was the only way I could see a path to make this work. But before I tripped over something I didn't see, thought I would throw it out for comment. We had done a cash out option for the borrower before, but he has sold land since then and is now under the 100 acres and that kept muddying the waters for me.

100 acres. Can I assume he's a single gentleman? If not, the family homestead is 200 acres. I bet you knew that.

yes, but thanks for making sure. Single man. .