Financing for Agricultural Land in Hawaiʻi

I get a lot of calls from buyers researching particular topics about which I have written regularly over the past decade. Lately one of those topics is how to finance agricultural land — or an actual working farm or ranch. And I happened to see my friends from American AgCredit at their booth at last weekʻs Hawaiʻi Macadamia Nut Association annual conference and picked up their latest brochure.

If you are interested in buying land which might be zoned agricultural but is not going to have active agricultural activity (for example, a lot in Kohala Ranch), you should be considering a regular land loan product. Same if you are buying a residential lot. If you are already a resident of Hawaiʻi, you may be able to find a land or land-and-construction loan product through your local credit union.

Here are those links:

• Land Loan Basics – including agricultural land loans
• Land and Construction Loans for Hawaiʻi Island Residents
• The “malasada” or doughnut post

American AgCredit – I stopped by their booth at the Hawaiʻi Macadamia Nut Association conference and picked up information and swag – they know exactly what a farmer, rancher, or real estate broker specializing in agricultural properties needs in their truck at all times (suncreen, lip balm, wipes)

Options for Financing Ag Land Purchases or Agricultural Operations

As I wrote in the posts above, I am a fan of American AgCredit for financing farmers and ranchers, and not only because their appraiser brings me malasadas and they have the best swag for someone who spends a lot of time showing big parcels of land.

American AgCredit is part of the Farm Credit System serving farmers and ranchers across the rural part of the western United States, including Hawaiʻi. This system provides nearly 1/3 of the financing for the nationʻs agricultural industry, with a range of products from financing of real estate purchases to loans to develop operations, purchase or lease equipment, or build processing facilities.

They are the only option I know offering credit terms up to 30 years, compared with a regular land loan term of 3-5 years. They can do small loans, but when I asked whether they could provide financing for a buyer of Hana Ranch, listed for $75 million, they did not bat an eyelash. Of course, they said.

Although sometimes buyers are looking for a farm or ranch with existing operations, often buyers are looking at an acreage zone for agriculture, with a dream of their own in mind. As long you have a business plan, American AgCredit might be an option. In fact, they have a special loan program for young and beginning farmers. If you are not fresh out of college with a degree in agricultural science, you could begin with training and resources through the Kohala Centerʻs Beginning Farmer-Rancher Development Program.

Calf with the iconic Hana Ranch brand – from beginning farmer on a small acreage to a large working ranch, financing is available for purchase and operations

Land in Hawaiʻi is not cheap. As my young friend A.R. explained to the Hawaiʻi State Senate about farming and ranching: Itʻs hard. Itʻs early. And late. Itʻs stinky. Itʻs dirty. And it needs support.

American AgCredit is one of the resources available to support agriculture in Hawaiʻi, along with various USDA and other government programs. From coffee to cattle, the Big Island is a great place to make your home if youʻd like to contribute to food self-sufficiency and support the local economy.