It’s great to know that you have found the land.
However, the area you are trying to buy falls in the high-risk category and it could limit you're borrowing to 80% of the property value. However, some lenders don't have any postcode restrictions at all so you could potentially borrow up to 95% of the property.
Also, check out the postcode calculator to get a pretty accurate idea for lending policies and restrictions for the particular area that you’re looking to buy a hobby farm.
For hobby farms less than 10 hectares, you can borrow up to 95% of the property value. But please note that in Victoria, rural properties have been classified as:
- Rural Living Zone (RLZ) VIC: These are usually used for residential purposes with minor agricultural activities.
- Rural Conservation Zone (RCZ) VIC: These are rural areas of environmental importance. Here, a single house can be built, and are typically acceptable for lending purposes.
- Rural Activity Zone (RAZ) VIC: These lie under flexible zoning which allow agricultural, residential, tourism and business use. The usage of the property will determine how much you can borrow.
- Farming Zone VIC: Sometimes these are hobby farms and other times commercial farms. The land size and usage will determine your borrowing power.
If you can tell me a little more about the services connected to the property, I can give you some idea of your ability to get approved for a hobby farm loan.
Cheers,
Otto