Frequently Asked Questions - Farm Lending Canada

Welcome to our Mortgage Broker FAQ page.

Whether you’re new to working with us or have partnered with Farm Lending Canada before, we’re here to make the process as smooth and transparent as possible. Below, you’ll find answers to the most common questions about submitting deals, our lending criteria, required documentation, and more. If you don’t see what you’re looking for, please feel free to contact us directly — we’re always happy to help.

FAQ’s	FARM & RANCH OPERATIONS	RURAL RESIDENTIAL & SMALL AGRICULTURAL (HOBBY FARMS)
Do you work with self-employed borrowers or business owners?	Yes! All sources of income are used to support the farm.	Absolutely. We support various income types, including self-employed borrowers. The Bank Statement Program is available to purchases, while standard documentation is required for refinances. We also offer a Net Income After Tax program for incorporated borrowers.
What expenses can be added back when using T1 Generals to calculate net business income?	Net farming income is averaged over the most recent two years , and we add back interest, depreciation (CCA), and other non-cash expenses where applicable. We will also review inventory changes.	Net business income is averaged over the most recent two years (or most recent year if declining), and we add back interest, depreciation (CCA), and other non-cash expenses where applicable.
Can I use the Bank Statement Program for a refinance?	No, however, we may ask to review bank statements to verify certain expenses.	No, the Bank Statement Program is currently available for purchase transactions only.
How does the Bank Statement Program work?	N/A	We take a conservative approach. We review the most recent 12 months of business bank statements and analyze all credit and debit activity to determine net business income.
What’s the process for the Hobby Farm / Rural Residential program?	All working farms, generating income from the farm, are eligible.	We are flexible with property size and location. Generally, All acreage and one outbuilding are included in the appraised value. Underwriting is similar to a prime lender. The home and property must be in good condition, and gross farm income must not exceed $20,000/year.
What qualifies as a Hobby Farm or Rural Residential property?	Working Farms.	These are rural properties used for personal enjoyment or supplemental income – not full-time commercial farming. They may include features like small livestock, gardens, or crops.
Is there a maximum acreage limit?	Working farms, ranging in sizes from 10s of acres to 1000s of acres.	No, there is no limit. We include the acreage in the lending value, except for very large residential parcels (typically > 100 acres).
Can the borrower earn income from the farm?	Yes, primary income should be coming from the farm operation.	Yes, gross farming income of up to $20,000/year is allowed under this program.
What if the gross farming income is more than $20,000/year?	N/A	If gross farming income exceeds $20,000/year, the file may be a better fit under our Small Agricultural program or our Private Lending option, depending on the overall application.
Are outbuildings allowed?	Yes, all farm buildings in good condition, may be included in the valuation of the farm property.	Yes. We allow one outbuilding to be included in the appraised value.
What is the typical turnaround time to receive a response from the credit team?	Once all the information is received, a conditional approval and discussion paper, is typically received within 2-3 business days.	Our underwriters aim to respond within 24 business hours of file submission. Conditional approvals are typically received within 1–2 business days.
Do you offer mortgage solutions in second position?	No, we typically do not offer 2nd position mortgages.	No, we do not currently offer second-position mortgages.
What is the maximum loan-to-value (LTV)?	We offer up to 75% LTV. The actual LTV approved depneds on factors such as exit plan, turnaround plan, and the amount of time our financing is required to be in place.	We offer up to 80% LTV. The actual LTV approved depends on factors such as credit score, property type, and location.
What supporting documents are required?	Copy of signed broker version of applicant(s) mortgage application. Copy of the mortgage broker statement of disclosure and consent form applicable to your province. Loan request details Address of the subject property(s) Detailed Personal Net Worth Statement(s) with a credit bureau report 3 years of Personal tax returns with all applicable Business, Rental, and Farm Statements and/or Corporate Financial Statements (Notice of Reader at a minimum) as applicable. Breakdown of the use of funds Cashflow projections (revenue and expenses) for 1-3 years depending on the operation. AACI Appraisal Executive Summary of the history of the operation/borrower, experience, and production plans for the property/operation. Proposed exit strategy and timeline	Before submission, we request income documents and any other supporting information you’ve collected. Additional documentation may be requested after conditional approval is issued.
How do we know what interest rate to use?	All Farm loans are based on risk rated pricing. A full financial review is undertaken before a rate is presented to the borrower	Our rates are shared in our weekly emails. The starting rate is based on the borrower’s credit score, with pricing premiums as applicable. We follow B20 stress test guidelines (contract rate + 2%). For qualification, Prime program B20 GDS/TDS must be under 39/45, and under 50/50 for Alt-A.

WATCH NOW! Interview with Tom Hickey about our Hobby Farm Mortgage Product

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