Financing Acreages & Rural Properties in Iowa | Lofty Lender
If you’ve ever dreamed about owning a home on acreage, a hobby farm, or a rural property outside the city limits, you’ve probably already discovered something frustrating:
Traditional financing does not always make the process easy.
On a recent episode of The Lofty Lender, I, Kyle Guldenpfennig (#TallMoneyMan), sat down with Charlie Chedester to break down a unique financing option that is helping buyers purchase properties that many lenders struggle to approve — the Rural Living Plus program through Compeer Financial.
Whether you are searching for:
A country home with 20+ acres
A hobby farm with barns or outbuildings
A barndominium or shouse
Recreational land for hunting or fishing
A rural property with agricultural characteristics
…this conversation explained why conventional loans sometimes fall short and how specialized rural financing may open the door to opportunities buyers didn’t realize were possible.
Why Traditional Financing Struggles With Rural Properties
Most conventional mortgage programs were designed around standard suburban residential homes.
Once a property starts including things like:
Large acreage
Tillable ground
Barns or silos
Chicken coops
Outbuildings
Mixed agricultural use
Mobile homes on large tracts of land
…the risk profile changes from a traditional primary residence into something lenders consider more complex.
Charlie explained that lenders often get nervous when:
The land value exceeds the home value
The property can generate agricultural income
The home has “non-standard” features
The acreage impacts marketability
That’s why buyers often hear phrases like:
“The property has too much land.”
“The appraisal may be difficult.”
“This doesn’t fit standard guidelines.”
“You may need a farm loan.”
But that does not mean financing is impossible.
What Makes the Rural Living Plus Program Different?
The Rural Living Plus program is designed specifically for unique rural properties that traditional financing often cannot handle.
One of the biggest advantages?
30-Year Fixed Financing
Historically, buyers purchasing acreages or hobby farms were often forced into:
Balloon loans
Adjustable-rate mortgages (ARMs)
Shorter 15–20 year amortization schedules
Those options usually meant:
Higher monthly payments
More risk
Future refinancing uncertainty
The Rural Living Plus program offers the stability of a long-term fixed mortgage, helping buyers secure predictable monthly payments.
That can make a massive difference when financing larger rural properties.
Types of Properties the Program Can Help Finance
Hobby Farms
One major focus of the program is hobby farms. These are typically:
5+ acre properties
Located outside city limits
Include smaller agricultural features like barns, chicken coops, pig pens, or outbuildings
The key distinction is that the property is not the borrower’s primary source of income.
Charlie and I discussed how this program works well for buyers who:
Want animals for personal use
Enjoy gardening or small-scale farming
Want rural living without operating a full commercial farm
The property can even have limited income potential as long as it is not functioning as a large-scale agricultural business.
Recreational Land & Bare Land Loans
Another standout feature is financing for bare land and recreational acreage.
This can include:
Hunting land
Fishing property
Rural recreational acreage
Land intended for future use
The program generally looks for:
20+ acres
Potential to generate modest income (even as little as $500 annually)
That flexibility creates financing opportunities many local banks simply will not offer.
Shouses & Barndominiums
The Rural Living Plus program is also open to:
Shouses
Barndominiums
Shed homes
Other non-traditional rural home styles
Traditional financing has historically struggled with these because comparable sales are limited. This program allows appraisers to expand the search radius for comps, making financing much more realistic for rural custom properties.
Real-World Examples From the Podcast
During the episode, we shared several real scenarios where rural financing became challenging under conventional guidelines.
One buyer was purchasing a home on 40 acres. Because conventional financing could not accommodate the entire property, the buyer initially had to separate the home and three acres from the remaining farmland and finance them separately.
Another buyer purchased a double-wide home on acreage with:
A grain bin
A silo
A corn crib
Additional rural structures
Traditional financing nearly fell apart because active agricultural structures can create eligibility issues. Fortunately, the buildings were no longer operational, which allowed the transaction to close conventionally. If they had still been in use, a rural portfolio-style program would likely have been necessary.
These are exactly the types of situations where specialized rural financing becomes incredibly valuable.
Three Key Takeaways for Rural Home Buyers
1. Do Not Assume the Property Cannot Be Financed
Just because a property has:
Acreage
Barns
Outbuildings
Rural zoning
Agricultural characteristics
…does not mean financing is impossible.
There may simply be a better loan product for the property type.
2. Discuss the Property Details Early
The earlier your lender understands:
Acreage size
Intended use
Animals or farming plans
Outbuildings
Income-producing features
…the smoother the financing process becomes.
Rural properties are not “plug and play” like subdivision homes. Communication matters.
3. Work With a Lender Familiar With Rural Financing
Not every lender has access to niche rural loan programs. In fact, during the episode we discussed how only a small number of Iowa lenders currently offer this specific program.
Working with someone experienced in:
Acreage financing
Hobby farms
Rural appraisals
Agricultural overlays
Land lending
…can save buyers enormous amounts of stress and confusion.
Final Thoughts
One of the biggest myths in real estate is that every property fits neatly into conventional financing guidelines.
That simply is not true.
Rural properties are unique, and they often require creative mortgage solutions backed by lenders who understand how these homes function in the real world.
If you are considering purchasing:
An acreage
A hobby farm
Hunting land
A barndominium
Recreational property
A rural home with outbuildings
…it is worth exploring what options exist before assuming the deal cannot work.
If you enjoyed this conversation and want more real-world homebuying education, be sure to search for the podcast The Lofty Lender with #TallMoneyMan wherever fine podcasts are downloaded. We break down mortgage topics, market trends, and real buyer scenarios in a way that is practical, honest, and easy to understand
