I have a Realtor with a friend that she feels could use a HECM but it’s a working farm on 40 acres. I told her it would be very difficult to find comps, but it appears that she has some. Even so, would we even consider this property for a HECM, regardless of the comps?
We cannot lend on working farms. It isn’t the acreage that is the problem. The nature of the use of the land requires them to do a commercial loan.
Broker Response to answer above: So, if the borrower retired and it was no longer a working farm, as long as we could find good comps, would we consider it then? I was under the impression that we weren’t interested in properties with a lot of acreage at all.
UW response: With comps we can do properties with acreage that highest and best use are residential. If these borrowers have filed a schedule F on taxes and property shows crops or whatever they farm, then it would be a tough sell to verify it is no longer a working farm.