Rural Properties FAQ

Yes. We buy mortgages secured by residential properties in all markets, including rural locations, as long as the subject property is adequate collateral for the mortgage transaction based on the value, condition and marketability of the property.

Appraiser selection is very important. Freddie Mac requires that in every appraisal assignment the appraiser must have the knowledge and experience in appraising the type of property they have been asked to appraise. In rural areas this is particularly important because an appraiser with local market experience will be able to provide the Seller with information to help determine property eligibility. For example, the appraiser will be able to describe the past, present and future land uses. Sellers might consider speaking directly with the appraiser on these challenging assignments so the appraiser can answer questions as well as describe nuances of the property or the neighborhood that are not readily apparent when reading the appraisal report.

It depends. If a property is zoned for agricultural use, the Seller must ensure that the property is residential in nature, its residential use is a permissible use under the zoning classification and its use does not primarily involve commercial activities such as farming or ranching.

Freddie Mac does not have site size or acreage limitations. However, when a property consists of a large acreage parcel(s) and is in a location where commercial farms or ranches are typical, the Seller needs to perform additional analysis of the property characteristics to make sure the property is residential.

No. Freddie Mac will only purchase mortgages secured by residential properties. The mortgage must not be secured by vacant land or property primarily used for agriculture, farming or commercial enterprise.

Yes. Hobby farms are typically small farms where the homeowner engages in farming activity for personal use. In this case the primary use of the property is residential and the secondary use is for insignificant farming activity. Therefore, the existence of a small roadside stand used for selling fruits and vegetables does not result in the property being ineligible. However, properties used primarily for farming or ranching are ineligible.

It depends. Agricultural-type outbuildings such as silos, facilities for farm animals and large barns may be an indication that the property is a farm. The Seller needs to determine whether the property is primarily residential based on the property characteristics, zoning and land use of the property. If the primary use of the property is residential, despite the presence of agricultural-type outbuildings, then the property meets Freddie Mac’s eligibility requirements. However, if the property is used primarily for farming or ranching, then the property is ineligible.

Yes. The mortgage secured by a property that is no longer a working farm is eligible for delivery to Freddie Mac. Evidence such as photographs of the property and outbuildings, neighborhood description, etc. must be provided in the appraisal report showing that the property is no longer a working farm.

No. Regardless of whether the borrower is personally engaged in the activity or not, if the property is being used for farming or ranching, the property is not eligible.

It depends. A market area with agricultural properties, undeveloped land, and land development properties, does not necessarily make a residential property in this location ineligible. Freddie Mac requires the mortgage to be secured by a property that is residential based on the property characteristics, zoning and land use. The appraiser must consider these non-residential characteristics when performing the market area analysis.