Problems with USDA Rural Guaranteed 502 home loan

by PJC

We bought a house with the USDA Rural Development Section 502 Guaranteed loan. I was told by the local USDA Rural County rep that although our property, land and buildings, were never used in the past by previous owner as a way to bring income or the outbuilding classified as farm service, we cannot START a "mini-hobby farm" (we are calling it a croft since it is small) because this loan type does not permit use of the land in agriculture, farming, or commercial work. I looked at the guiding documents for USDA field staff when assessing qualified borrowers and do not read it that way at all; especially since we would be STARTING a farm and not continuing something from a previous owner who used the land or buildings as a business. (Anything that did bring in income in the past would never be eligible for this loan type anyway under USDA guidelines.) Anyone have experience with this? eire031700 {AT} yahoo {DOT} com.

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