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usda property guidelines

Recently found a house in Alabama and have been approved for a usda guaranteed loan. The property is on 6 acres and roughly 2 acres are in planted pine trees. Would this be considered income producing even though they were planted for privacy purposes only and have never received a crop check for them? by ashpeters1986793 from , Alabama. Aug 7th 2014 Reply


Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 4,228 contributions

USDA has rules about income producing properties... I do a lot of USDA loans in MN, WI, and SD - and as long as the current owner isn't selling them, then you shouldn't have any issue. Appraisal coming back more than the house being an issue? Never seen that in over 20-years of lending. www.MortgagesUnlimited.biz/usda

Aug 8th 2014
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No. They would not be considered income producing

Aug 7th 2014
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Even if on the deed/survey it shows a value for them? We're just worried we've already spent money on the inspection and would hate to have appraisal done and to be denied because of the trees

Aug 7th 2014
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I haven't seen them of course but if they were planted for a windbreak and there is no history of the property selling trees, it wouldn't be expected that an appraiser would give them any value. In 20 years experience I have not seen an appraiser to give value to any type or quantity of trees.

Aug 7th 2014
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Ok thank you

Aug 7th 2014
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I'm sorry to bother you but I do have one more question. Have you ever known or heard of a usda loan being denied because the appraisal came back more than what you were offering on the house? I've come across articles that said yes

Aug 8th 2014
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when you say as long as the current owner isn't selling them do you mean as long as they have never sold nor made any money off of them we should be ok?

Aug 8th 2014
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Eddie Sexton (esexton)
#7 ranked lender in Kentucky - 54 contributions

USDA will never turn down your file because it is worth more than what you are paying. Also, if the trees haven't been part of any "for profit" agriculture and they were planted as a wind break, you will be fine. If you are not happy with your current mortgage company because they aren't answering these questions for you, I'd be glad to help with your mortgage as well. If interested, you can call me at 502-645-0102. Eddie Sexton

Aug 8th 2014
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Eddie Sexton (esexton)
#7 ranked lender in Kentucky - 54 contributions

USDA will never turn down your file because it is worth more than what you are paying. Also, if the trees haven't been part of any "for profit" agriculture and they were planted as a wind break, you will be fine. If you are not happy with your current mortgage company because they aren't answering these questions for you, I'd be glad to help with your mortgage as well. If interested, you can call me at 502-645-0102. Eddie Sexton. I am licensed in Alabama as well

Aug 8th 2014
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Sean Young (SeanYoung)
#2 ranked lender in Colorado - 1,112 contributions

You will be fine as long as it is currently not an income producing property. Like they are selling trees on the roadside and have signs up. Otherwise I think you are going to be good to go. Also, you will have no issues if your appraisal comes in higher. The only time this would be an issue is if this was a Non-Arms Length Transaction and even then as long as you could explain it, you would be good. Best wishes, Sean

Aug 10th 2014
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