In this post,I hope to provide you with some guidance in how to pay for that homestead you have dreamed of owning. You may be one of the lucky ones with a wealthy relative or you just happened to win the lottery. Like many of us, you are looking for those alternative ways to pay for it and make your homesteading work. The goal of my wife and I are to pay for what we will need to make it a reality by saving money and paying cash. We will indeed have some monthly payments involved, however, we want to keep those at a minimum. It really defeats the purpose of giving all of your hard earned money to corporate interests. Who really wants to have a never ending mortgage or high interest rates.
You always have the option of going to a Commercial lender and borrowing the money. That will only result in up to a thirty year mortgage, with most of your payments being interest. The downfall in commercial lending is that never-ending mortgage, high down payment requirements, mandatory insurance and property taxes. I am certainly no financial expert in these matters, but I can certainly see the writing on the wall and want more for my homestead while spending less to get there.
The Rural Housing Loan Options-
Your first option is always paying for everything in cash by saving. If you cant quite get there and your homestead is rural, try a US Department of Agriculture (USDA) Rural Housing loan. They have two loan programs available depending on where you live. The first is the Single Family Direct Housing Loan, also known as a Section 502 Direct Loan. These are loans directly from the Department of Agriculture and you deal directly with them, and loans are based on your income level and ability to repay. They also require either a low or no down payment and the interest rate is much lower than a commercial lender. Another positive is that you do not need a perfect credit rating or credit score. First, you will need to submit a pre qualification form to determine if you qualify.
They also have the USDA Guaranteed Housing Loan which are loans through a participating lender that are guaranteed by the USDA. In these you may see a higher down payment requirement and the credit score may be higher. Each area will have different income requirements. The link below will also give you a search function to learn if the programs are available in the area you may be interested in. Without repeating the nuts and bolts of their programs, here is a link to their site and offerings.
Earn While you Homestead-
Perhaps you have a desire to have your homestead pay for itself. Ideally,we would all be able to make our homesteads pay for themselves right away, but it doesn’t always work like that. I will list for you several ways to get started in paying for your homestead.
1. Get out of debt and stay out of debt……
Pay off all those credit cards and other bills as fast as you can. As with us, even if you have a small mortgage on the property itself, you can pay extra each month without a prepayment penalty and pay it off sooner rather than later. If you stick with it, you can pay it off in 15 years instead of 30 years.
2. Buy Used….
This goes along with the whole idea out of staying and being debt free. As much as possible, pay only cash for things you buy, especially equipment. You may end up buying an old truck or tractor and spend some time making minor repairs or upgrades on them. In the end, you don’t have an enormous payment or any glamour. It can make it worthwhile in the end. I will stress not to compromise safety in the interest of buying used. It’s not a wise idea to purchase used electrical panels, wiring, or receptacles for your home or shop. Most applications will require an electrical permit if you are a Do It Yourselfer. Think about the safety of you and your family!
The concept of buying things second-hand goes beyond just vehicles– Some are yard sale fanatics and purchase a large number of clothes, household items, and kitchen stuff that way. If you are just beginning, yard sales are a great way to find items that you may need. Its also a great way to sell many items you want to get rid of.
3. Become a DIYer….
I am fortunate that I was able to learn many skills to be able to do things myself. Some were learned from others and many I learned myself, by doing them myself. I have been able to complete electrical, plumbing, woodworking, carpentry, landscaping, and welding. These skills will become invaluable when building our homestead. Sometimes local laws require hiring professional contractors to complete tasks like electrical installation, and its unavoidable. You too can learn these skills and complete many of the same tasks. For a nominal fee many local Community Colleges offer courses and certifications in these areas. It may cost you in the beginning, however, in the long term you will have the knowledge that will last much longer.
4. Barter When You Can….
Whenever you can, barter for goods and services. You may have skills that someone else may be in need of, and they may have something you really need for your homestead. Many people will be happy barter with you to save some money. I have known people who traded electrical work for tractor work. Some will happily trade farm animals for other animals. People will always barter food and produce. Much of this also depends on your location and whats available. Check local advertisements through websites, newspapers, and social media sites.
5. Be Creative with Small Income Streams…
Like many, I eventually hope to have a small income from this blog alone. Many others are creative and find ways to make money on sites like Ebay and Craigslist. Ebay mostly consists of buying, selling, and shipping. Craigslist provides the same opportunity but keeps what you are buying and selling more local. Income can be made but use caution with Craigslist and meeting people in person. Handmade items,if you are artsy and creative, are great ways to make some extra money!
If you want to use your homestead to make money, many grow vegetables for their own consumption, while some sell their excess at a local farmers market. My wife and I plan to grow our own organic vegetables and start raising our honeybees again once things are settled on our homestead. Raising chickens and selling eggs are an additional source of income for your homestead.
You can find through most ads people wanting some type of service or work done. If you lack the expertise in some areas, consider getting the training that you need. You can always write off the expense of the training on your taxes, along with the investment in equipment and supplies. Remember that some areas like electrical, plumbing, and heating and air require a license to operate as a business.
There are many other ways to generate income and pay for your homestead and its up to your creative imagination to get there! Happy Homesteading!