source:
  type: guide
  id: va-m26-7-ch07-t08
  authority: VA Lenders Handbook (VA Pamphlet 26-7), Chapter 7, Topic 8 — Farm Residence
    Loans
  description: VA Lenders Handbook (VA Pamphlet 26-7), Chapter 7, Topic 8 — Farm Residence
    Loans.
  coverage_tier: operative
obligations:
- id: va-m26-7-ch07-t08-full
  canonical_id: va-m26-7-ch07-t08-full
  section: VA Lenders Handbook (VA Pamphlet 26-7), Chapter 7, Topic 8 — Farm Residence
    Loans
  type: do
  tags:
  - regulator-direct
  - va
  - va-handbook
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: VA Lenders Handbook (VA Pamphlet 26-7), Chapter 7, Topic 8 — Farm Residence
      Loans
    source_class: va-handbook
    source_url: https://www.benefits.va.gov/warms/pam26_7.asp
    snapshot_id: 0e2735cf8ca44400
    fetched_at: '2026-05-23T01:53:53Z'
    content_hash: sha256:74297ad4fadd5e592b5688f5567170f8c128f7c9749dd06edd59e735a69099d8
    paragraph_quote: '8. Farm Residence Loans Change Date March 11, 2019 • This chapter
      has been revised in its entirety. a. Eligibility A loan for the purchase, construction,
      repair, alteration, or improvement of a farm residence which is occupied or
      will be occupied by the Veteran/borrower as a home is eligible for guaranty.
      The loan cannot cover the: • nonresidential value of farm land in excess of
      the home site, • barn, silo, or other outbuildings necessary to the operation
      of the farm, or • Farm equipment or livestock. A portion of the proceeds of
      a loan to construct a farm residence on encumbered land owned by the Veteran
      may be used to pay off the lien, or liens on the land only if the reasonable
      value of the land is at least equal to the amount of the lien(s). b. Underwriting
      If some or all of the income necessary to support the loan payments comes from
      farming operations, the Veteran’s ability and experience as a farm operator
      must be established. The procedures and analysis provided under “Self-Employment
      Income” in Chapter 4 apply generally. In addition, apply the following: For
      new farmer or new farm operation, the lender must obtain the following: • Veteran’s
      proposed plan of operation of the farm, showing the number of acres for each
      crop, amount of livestock, etc., upon which an estimate of income and expenses
      may be made. • Veteran’s statement that he or she owns, or proposes purchasing
      the farm equipment required to operate the farm. If additional indebtedness
      is to be incurred in the purchase of this equipment, the statement should contain
      full details as to repayment terms, etc. Continued on next page VA Pamphlet
      26-7 Revised Chapter 7: Loans Requiring Special Underwriting, Guaranty, and
      Other Considerations 7-33 8. Farm Residence Loans, continued b. Underwriting,
      continued An estimate of farm income and expenses by a local farm appraiser
      designated by VA or another qualified person, or the estimate used by a lender
      that has agreed to carry an operating line of credit for the Veteran. The estimate
      should be based on the Veteran’s proposed plan of operation, his or her ability
      and experience, and the nature and condition of the farm to be sold, including
      livestock and livestock products. The expense estimate must detail labor, seed,
      fertilizer, taxes and insurance, repairs, machinery, fuel, etc. • A copy of
      a commitment from a lender for an operating line of credit or evidence of the
      resources to be used to cover operating expenses. • Experienced farmer continuing
      the same farm operation. If the Veteran finances operations out of an operating
      line of credit, obtain records of advances from, payments to, and carryover
      balances on the operating line of credit for the last 3 years (or additional
      periods if needed to demonstrate stability of Veteran’s operation). Analyze
      the reasons for any build-up of operating debt. VA Pamphlet 26-7 Revised Chapter
      7: Loans Requiring Special Underwriting, Guaranty, and Other Considerations
      7-34'
  judgment: false
