What Is a Farm Loan in California?
A farm loan in California is a specialized agricultural real estate mortgage for vineyards, wineries, ranches, farms, orchards, equestrian estates, and bare agricultural land. Unlike conventional mortgages, farm and winery loans value your property the way a farmer does: bare land plus permanent plantings, irrigation systems, and agricultural improvements all count toward your collateral. Most mortgage brokers and banks don’t offer these programs. We do.
To qualify, your property must be at least 5 acres or produce $5,000+ in annual agricultural receipts, and its highest and best use must be agriculture. This isn’t a standard rural home loan repackaged with a different name.
The fundamental difference is how collateral works. A conventional mortgage looks at your house and lot. A farm loan looks at your entire agricultural operation:
- Bare land value including permanent plantings and irrigation
- Dwellings and residences whether owner-occupied or not (up to $750,000 contribution)
- Structural agricultural improvements like barns, grain storage, livestock facilities, greenhouses, packing facilities, and processing buildings (up to 25% of total collateral value)
That collateral calculation is why farm loans exist. An 80-acre farm with $960,000 in bare land, a $500,000 house, and $250,000 in improvements has $1,710,000 in total collateral. A conventional lender might only see the house.
Why Can’t Regular Mortgage Lenders Do This?
Standard mortgage lenders (banks, credit unions, most brokers) don’t have access to dedicated agricultural lending programs. Their underwriting systems are built for residential real estate: houses, condos, townhomes. They don’t know how to value permanent plantings, irrigation infrastructure, or agricultural improvements.
When you bring a 120-acre almond orchard to a standard lender, they either decline it or try to force it into a residential box, ignoring most of your property’s value. Agricultural lending programs are specifically engineered for these properties.
As California mortgage specialists with 40+ years of experience, we’ve built relationships with dedicated agricultural lenders that most brokers never access. That’s the difference.
Farm Loan Programs Available in California
California farm loans come in four program types ranging from streamlined approvals up to $5 million to full underwrite financing exceeding $12.9 million. Each program targets different loan sizes and borrower situations.
Program Comparison
| Feature | Streamlined | Full Underwrite (Standard) | Full Underwrite (Choice) | Revolving Line of Credit |
|---|---|---|---|---|
| Loan Amount | $300K–$5M | $400K–$12.9M+ | $400K–$12.9M+ | $400K–$12.9M |
| Max LTV | 65–70% | Up to 70% | Up to 60% | Up to 50% |
| Credit Score | 720+ recommended | 680+ | 680+ | 680+ |
| Pricing | Choice or Standard | Standard | Choice (better rates) | Standard |
| Documentation | Reduced | Full (2+ yr tax returns) | Full (2+ yr tax returns) | Full (2+ yr tax returns) |
| Approval Speed | 1 business day | Standard timeline | Standard timeline | Standard timeline |
| Best For | Smaller operations, fast closings | Large farms, complex operations | Strong borrowers wanting best rates | Ongoing capital needs |
Streamlined Program (Up to $5 Million)
The streamlined program is designed for agricultural borrowers who want fast, reduced-documentation financing. Credit decisions can be made within one business day.
- $0–$1.5 million: 70% maximum LTV, application only (no tax returns required)
- $1.5–$3 million: 65% maximum LTV, application plus two years of tax returns
- $3–$5 million: 65% maximum LTV, application plus two years of tax returns
Choice pricing (better rates) is available for loans at 55% LTV or below. Standard pricing applies above 55% LTV.
Full Underwrite Programs ($400K–$12.9M+)
For larger agricultural operations or borrowers seeking maximum LTV, the full underwrite program provides comprehensive financing up to $12.9 million for properties over 1,000 acres or up to $50 million for properties under 1,000 acres.
Two pricing tiers are available:
- Standard pricing: Up to 70% LTV, total debt coverage ratio of 1.25+
- Choice pricing (better rates): Up to 60% LTV, total debt coverage ratio of 1.50+
Both require a minimum credit score of 680 and full documentation including tax returns with minimum three years and four years alternate bearing.
Revolving Line of Credit (Up to $12.9 Million)
For agricultural operations needing ongoing access to capital (working capital, seasonal expenses, equipment, or expansion), a revolving line of credit provides:
- Up to $12.9 million with 50% maximum LTV
- Unlimited number of draws with $2,500 minimum per draw
- Total debt coverage of 1.65+ required (must meet TDC after 3% rate)
- Collateral calculated on bare land value only (improvements and plantings may exist but LTV based on land)
This program works well for vineyards, orchards, and farming operations with cyclical capital needs.
How Farm Loan Collateral Works
The collateral calculation is what makes farm loans fundamentally different from any other mortgage product. Understanding how it works helps you estimate your borrowing capacity.
Total Eligible Collateral Formula
Total Eligible Collateral Value = Bare Land Value + Dwellings + Structural Improvements
Where:
- Bare Land Value = value of bare land, permanent plantings, and irrigation
- Dwellings = any residence on the property (up to $750,000 contribution)
- Structural Improvements = agricultural improvements solely used for agricultural commodities (up to 25% of total collateral value)
Real-World Collateral Examples
80-Acre Homestead
| Component | Details | Appraised Value | Lendable Value |
|---|---|---|---|
| Bare Land | 80 acres at $12,000/acre | $960,000 | $960,000 |
| Dwelling | House | $500,000 | $500,000 |
| Improvements | Grain storage + barn | $250,000 | $250,000 |
| Total | $1,710,000 | $1,710,000 | |
| 70% LTV: | $1,197,000 |
160-Acre Farm with Significant Improvements
| Component | Details | Appraised Value | Lendable Value |
|---|---|---|---|
| Bare Land | 160 acres at $12,000/acre | $1,920,000 | $1,920,000 |
| Dwelling | House | $500,000 | $500,000 |
| Improvements | Grain storage + hog finishing barn | $1,250,000 | $917,500 |
| Total | $3,670,000 | $3,337,500 | |
| 65% LTV: | $2,169,375 |
Note: Improvements capped at 25% of total appraised value. Dwelling contribution capped at $750,000.
230-Acre Vineyard (Bare Land Only)
| Component | Details | Appraised Value | Lendable Value |
|---|---|---|---|
| Bare Land | 230 acres at $20,000/acre | $4,600,000 | $4,600,000 |
| Total | $4,600,000 | $4,600,000 | |
| 65% LTV: | $2,990,000 |
Vineyard land with established plantings commands premium per-acre values because the permanent plantings are included in bare land valuation.
Vineyard & Winery Loans in California
Vineyard and winery financing is one of the most common uses for farm loans in California, and one of the hardest to get through traditional lenders. Most banks don’t know how to value grapevines, irrigation systems, tasting rooms, or barrel storage. Farm loans do.
California’s wine industry spans Napa Valley, Sonoma County, Paso Robles, Temecula Valley, Lodi, the Santa Ynez Valley, and dozens of other appellations. Vineyard land with established plantings regularly commands $20,000–$42,000+ per acre, well beyond what conventional residential lenders handle.
What Farm Loans Cover for Vineyards & Wineries
- Bare vineyard land with established vines and irrigation, included at full appraised value
- Tasting rooms, barrel rooms, and production facilities count as agricultural improvements (up to 25% of total collateral)
- Dwellings on winery property including owner-occupied or caretaker residences (up to $750,000 contribution)
- Bare land for new plantings with purchase financing for vineyard development
Vineyard Purchase, Refinance & Lines of Credit
Whether you’re acquiring an established vineyard, refinancing a winery operation, or opening a revolving line of credit for seasonal working capital, farm loan programs provide borrowing capacity that conventional mortgages can’t match. Winery operations with cyclical income from harvest and sales benefit from quarterly or semi-annual payment options aligned with cash flow.
For wineries that also qualify as small businesses, SBA 504 loans and SBA 7(a) loans offer additional financing options for equipment, construction, and working capital.
Who Should Get a Farm Loan in California?
Farm loans are right for anyone purchasing, refinancing, or accessing equity in California agricultural real estate, from 5-acre hobby farms to thousand-acre operations. If your property’s highest and best use is agriculture, you likely need a farm loan.
Ranchers & Equestrian Properties
Cattle ranch loans and equestrian estate financing across Santa Barbara County, San Diego County, the Central Coast, and California’s inland valleys qualify for farm loan financing. Riding arenas, stables, training facilities, and pasture improvements all count toward collateral.
Crop Farmers & Orchardists
Central Valley almond orchards, pistachio farms, citrus groves, row crop operations, and specialty agriculture throughout Fresno, Kern, Tulare, Kings, and Madera counties benefit from farm loans that value the agricultural operation, not just the house.
Hobby Farm & Small Acreage Operations
Farm loans aren’t just for large-scale operations. Properties as small as 5 acres qualify. Small vineyards, boutique orchards, hobby farms with livestock, organic operations, and lifestyle agricultural properties all use farm loan programs. If your property’s primary use is agricultural, the acreage minimum is low enough to include most small farms in California.
Beginning Farmers
First-time farm buyers can access agricultural financing even without an established farming history. The property must have agricultural use as its highest and best use, but you don’t need years of farm income to qualify. Bare land purchases for future agricultural development are eligible, and streamlined programs under $1.5 million require only a completed application with no tax returns. For beginning farmers who also qualify for USDA programs, we can help evaluate which path provides the best terms.
Agricultural Investors
Purchasing California farmland as an investment? Farm purchase loans provide financing for bare agricultural land acquisitions, operational expansions, and portfolio growth. Farm refinance loans offer cash-out for accessing equity in existing agricultural properties.
Recreational & Agricultural Retreats
Lakefront properties, hunting ranches, and recreational agricultural retreats on large acreage qualify when the property meets agricultural use requirements. Properties combining lifestyle and agricultural production are common in Nevada County, El Dorado County, and other Sierra foothills regions.
Schedule a call → We’ll evaluate your property and identify the right agricultural lending program.
California Agricultural Market: Why Farm Loans Matter Here
California is the nation’s #1 agricultural state with $60 billion+ in annual revenue, 88,000+ farms and ranches, and the highest farmland values in the country. This market demands specialized agricultural financing.
California Farmland by the Numbers
| Metric | Value |
|---|---|
| Annual Agricultural Revenue | $60 billion+ |
| Number of Farms/Ranches | 88,000+ |
| Total Agricultural Acreage | 43 million acres |
| Agricultural Commodities | 350+ types |
| Average Farmland Value | $13,700/acre (highest nationally) |
| Specialty Crop Land | $20,000–$42,000/acre |
| Top Crops | Almonds, dairy, grapes/wine, pistachios, strawberries, citrus |
Key Agricultural Regions
Central Valley. The agricultural heartland. Fresno, Kern, Tulare, Kings, Madera, Merced, Stanislaus, and San Joaquin counties produce the majority of California’s crop output. Almond orchards, pistachio farms, dairy operations, citrus groves, and row crops dominate. Farmland values range from $7,500 to $25,000+ per acre depending on water access and crop type.
Wine Country. Napa County, Sonoma County, San Luis Obispo (Paso Robles), and Temecula Valley represent California’s premium vineyard and winery regions. Vineyard land with established plantings regularly exceeds $20,000–$42,000 per acre. Farm loans are essential for transactions at these price points.
Coastal Ranching. Santa Barbara, Monterey, and San Luis Obispo counties feature cattle ranches, equestrian estates, and mixed agricultural operations on premium coastal land.
Sierra Foothills. El Dorado, Nevada, Placer, and Amador counties offer a mix of vineyards, ranches, organic farms, and recreational agricultural properties at more accessible price points.
North State. Shasta, Tehama, Glenn, and Colusa counties feature cattle ranches, rice farms, and diversified agricultural operations on larger acreage parcels.
Farm Loan Requirements in California 2026
Farm loan requirements in California center on agricultural property eligibility, collateral value, and borrower financial strength. Requirements vary by program. Streamlined options are faster with less documentation, while full underwrite programs accommodate larger and more complex operations.
Property Requirements
- Minimum 5 acres or producing $5,000+ in annual agricultural receipts
- Highest and best use must be agriculture (this is the defining requirement)
- All fixed and variable product options available (revolving lines of credit are separate)
- All title holders must be applicants; trusts must include an eligible co-borrower and personal guarantee
Borrower Requirements by Program
| Requirement | Streamlined | Full Underwrite | Line of Credit |
|---|---|---|---|
| Credit Score | 720+ recommended | 680+ minimum | 680+ minimum |
| Debt-to-Asset | ≤ 40% (Fast Track) | ≤ 40–50% | ≤ 50% |
| Current Ratio | ≥ 1.00 | ≥ 1.25–1.50 | ≥ 1.25 |
| Total Debt Coverage | ≥ 1.00 (2-yr avg) | ≥ 1.25–1.50 | ≥ 1.65 |
| Tax Returns | Not required under $1.5M | 3 years minimum | 3 years minimum |
| Application | Required | Required | Required |
What “Highest and Best Use Must Be Agriculture” Means
This is the key eligibility gate. The property must be primarily agricultural in nature. A rural home on 10 acres of unused land wouldn’t qualify, but the same 10 acres with a vineyard, orchard, livestock operation, or active crop production would. The property doesn’t need to be generating income at the time of purchase, but it must have agricultural use as its primary purpose.
If you’re buying rural property primarily for residential use, consider large acreage loan programs or USDA loans instead.
Farm Loan Interest Rates in California 2026
Farm loan interest rates in California vary by program, loan-to-value ratio, and pricing tier. “Choice” pricing is available for stronger LTV positions while “Standard” pricing applies at higher leverage. Both fixed-rate and variable-rate options are available across all programs.
How Farm Loan Rates Work
Farm loans use a two-tier pricing structure:
- Choice pricing (lower rates): Available for loans at 55% LTV or below on streamlined programs, and 60% LTV or below on full underwrite. Stronger collateral position = better rate.
- Standard pricing: Applies to higher LTV loans. Still competitive but reflects the additional leverage.
Rate factors include:
- Loan-to-value ratio: lower LTV unlocks better pricing
- Program type: streamlined vs. full underwrite
- Fixed vs. variable: variable rates start lower but adjust over time
- Loan term and amortization: longer terms may carry slightly higher rates
Alternative Income Documentation for Farm Borrowers
California farmers and agricultural business owners with complex tax situations may also qualify through bank statement loan programs that use 12–24 months of deposits instead of tax returns. For stated income loans on farm property, we can evaluate whether a bank statement program or a streamlined agricultural program provides better terms for your specific situation.
Rates change daily based on your collateral, LTV, and program type. Contact us for your personalized rate quote.
How to Get a Farm Loan in California
Getting a farm loan in California follows a similar timeline to other commercial mortgages, with specialized steps for agricultural appraisal and collateral evaluation. Streamlined programs can deliver credit decisions within one business day.
Step 1: Assess Your Property and Needs
Identify your property type (vineyard, ranch, farm, bare land), total acreage, and agricultural use. Determine your financing need: purchase, refinance, cash-out, or line of credit. Gather property details including any permanent plantings, irrigation systems, dwellings, and agricultural improvements.
Step 2: Contact Us for Program Matching
We evaluate your specific situation and match you with the right program. Factors include loan amount, property type, LTV requirements, documentation availability, and timeline. Not every agricultural property fits every program, and that’s where our expertise matters.
Step 3: Submit Your Application
For streamlined programs under $1.5 million, you may only need a completed loan application with no tax returns required. For larger loans, prepare two or more years of tax returns on all applicants. All applicants must sign and date the application before the credit review can proceed.
Step 4: Credit Decision
Streamlined applications can receive a credit decision within one business day. Full underwrite programs require more comprehensive review. If approved, you proceed to appraisal, title, rate lock, and closing.
Step 5: Agricultural Appraisal
A specialized agricultural appraiser evaluates your property’s total eligible collateral: bare land value, permanent plantings, irrigation, dwellings, and structural improvements. This appraisal differs from standard residential appraisals and requires agricultural expertise.
Step 6: Close on Your Agricultural Property
Complete the closing process with your chosen rate type (fixed or variable) and payment frequency (monthly, quarterly, or semi-annual). Agricultural closings may include additional documentation related to agricultural use, water rights, and property access.
Begin your application → or schedule a call to discuss your agricultural financing options.
Farm Loans vs. Conventional Mortgages vs. USDA Loans
Farm loans, conventional mortgages, and USDA loans serve different purposes. Understanding which fits your situation prevents wasted time with the wrong program.
| Feature | Farm Loan | Conventional Mortgage | USDA Loan |
|---|---|---|---|
| Purpose | Agricultural real estate | Residential real estate | Rural residential |
| Property Requirement | 5+ acres, agricultural use | Standard residential | Rural area, residential |
| Max Loan Amount | $12.9M+ | $832K–$1.25M conforming | County-dependent |
| Collateral | Land + plantings + improvements + dwelling | Dwelling + lot | Dwelling + lot |
| LTV | 50–70% | Up to 97% | Up to 100% |
| Down Payment | 30–50% | 3–20% | 0% |
| Payment Options | Monthly, quarterly, semi-annual | Monthly | Monthly |
| Agricultural Improvements | Counted as collateral | Ignored or penalized | Ignored |
| Best For | Working farms, vineyards, ranches | Houses, condos, townhomes | Rural homes (non-farm) |
When to Choose a Farm Loan
Choose a farm loan when your property’s primary value is agricultural: the land, plantings, and farm improvements are worth more than the dwelling. If a conventional lender is undervaluing your property or declining it due to acreage, agricultural use, or non-standard improvements, a farm loan likely provides better terms and higher borrowing capacity.
When to Choose Something Else
If you’re buying a rural home primarily for residential use (even on acreage), consider USDA loans for zero-down rural financing or large acreage programs for properties over 5-10 acres. For land purchases without agricultural use, land loan programs may be more appropriate.
Cash-Out Refinancing for California Farm Properties
Farm loan cash-out refinancing lets you access equity in your agricultural property for expansion, improvements, equipment, or any other purpose. Cash-out availability varies by program.
- Streamlined programs: No limitation on use of funds for loans up to $3 million. Loans above $3 million have a $1 million cash-out limit based on total aggregate exposure.
- Full underwrite (Standard): Up to 10% cash-out with unlimited amount if amortization is 15 years or less and LTV is 60% or below.
- Full underwrite (Choice): Cash-out available with the same LTV and amortization parameters.
- Revolving line of credit: Ongoing access to capital with unlimited draws ($2,500 minimum per draw).
Common uses for farm loan cash-out include:
- Purchasing additional agricultural acreage
- Planting new vineyards or orchards
- Building or upgrading agricultural facilities
- Equipment acquisition
- Working capital for seasonal operations
- Debt consolidation
Why Work with A Good Lender for Farm Financing?
Most mortgage brokers don’t offer farm loans because they don’t have access to dedicated agricultural lending programs. Standard broker networks connect to residential lenders like Fannie Mae, Freddie Mac, FHA, and VA. Agricultural real estate requires entirely different lending channels.
What Sets Us Apart
- Agricultural program access: We maintain relationships with specialized agricultural lenders that most brokers never encounter. When your property doesn’t fit a residential box, we have agricultural-specific solutions.
- 40+ years of California experience: We understand California’s agricultural regions: Central Valley crop land, wine country vineyards, coastal ranches, and foothill properties. Each region has unique valuation and lending considerations.
- Full spectrum of loan products: If a farm loan isn’t the right fit, we can pivot to large acreage programs, USDA loans, commercial loans, lot and land financing, or DSCR loans for agricultural investment properties.
- Broker advantage: Banks offer one product: theirs. We shop your agricultural scenario across multiple specialized lenders to find the best rate, terms, and program fit for your specific operation.
Your terms depend on property type, acreage, collateral value, and financial profile. Call (510) 589-4096 for a quote →
Common Farm Loan Myths in California
The most common misconceptions about farm loans prevent agricultural property owners from accessing financing they qualify for. Here’s the reality.
- “Farm loans are only for large-scale farming operations.” Properties as small as 5 acres qualify. Hobby farms, small vineyards, equestrian properties, and boutique agricultural operations all use farm loan programs.
- “My bank can handle agricultural property.” Most banks and mortgage companies don’t have agricultural lending programs. They’ll try to fit your farm into a residential mortgage, ignoring most of your property’s value. That’s not the same thing.
- “I need to show farm income to qualify.” The property must have agricultural use as its highest and best use, but you don’t necessarily need current agricultural income. Bare land purchases for future agricultural development qualify.
- “Farm loans have terrible terms.” Modern agricultural lending programs offer competitive fixed and variable rates with flexible payment options. The higher down payment requirements (30-50%) reflect the specialized collateral, not poor terms.
- “The process takes forever.” Streamlined programs deliver credit decisions within one business day. Even full underwrite programs follow a standard commercial lending timeline.
Explore More Agricultural & Rural Options
Not sure if a farm loan fits your situation? Compare our other programs for rural and agricultural properties:
- Large acreage loan programs — Rural properties, 5+ acres, USDA options
- Lot and land loans — Raw land, building lots, up to 45 acres
- USDA loans — Zero-down rural residential financing
- Commercial construction loans — Building agricultural facilities
- DSCR loans — Agricultural investment properties qualified on income
Every agricultural property is different. Call (510) 589-4096 to discuss your specific situation or view all niche program options.
