Pennsylvania HEMP Mortgage Guidelines

This guide covers Pennsylvania HEMP mortgage guidelines for farmers. Pennsylvania Hemp Mortgage Guidelines for HEMP Farmers. In the past, many lenders as well as lending agencies have not been favorable to the use of hemp-based products. Many suppliers and Distributors of hemp-based products have not been allowed to use that income to qualify for a mortgage. Many times, the funds would not even be allowed for down payment on home purchase. This is because of the vast gray area surrounding the hemp and cannabis industry.

Recently the state of Pennsylvania has come forth with black and white procedures. This is a big step in the right direction. These announcements came out February 15th, 2019. In this guide, we will update our viewers on Pennsylvania HEMP mortgage guidelines.

Let’s examine Pennsylvania HEMP mortgage guidelines and the mortgage financing landscape available to hemp farmers in Pennsylvania as of February 2025. We will see that it has changed significantly since 2019. This guide attempts to provide information about the current Pennsylvania hemp mortgage guidelines, including changes in state law, federal regulation, and other funding policies that affect hemp growers in the region.

The Progression of Hemp Cultivation in the State of Pennsylvania

Hemp cultivation has been actively encouraged in the state since the passing of the 2018 Farm Bill, which classified hemp as an agricultural commodity. The Pennsylvania Department of Agriculture (PDA) manages the hemp program in the state, including permitting and regulation processes for growers and processors. For instance, in 2024, the PDA provided 183 permits for growing hemp and 38 for processing, a significant amount for research. These numbers certainly show us the efforts that the state is making toward developing a strong hemp industry.

Obstacles to Hemp Farmers Securing Mortgage Loan Financing

As is the case with any financing, numerous obstacles and difficulties exist, especially for hemp farmers trying to obtain a mortgage for their financing needs. Historically, there have been major hurdles when securing mortgage financing for hemp farmers. Because of the huge association hemp has with cannabis and the crop’s legal problem, children, the majority of financial institutions disregarded any income that came from hemp activities. This would lead to the ever-changing supply and demand economy where plenty of restrictions were placed on these sorts of funds for down payments, and hemp income would be excluded from mortgage qualifying assessments.

Pennsylvania HEMP Mortgage Guidelines: Shifting Developments in Mortgage Policies

There have been several developments affecting mortgage finances for hemp farmers in recent years, and most of these changes have been for the better:

Federal Acknowledgement and Assistance

The U.S. Department of Agriculture (USDA) ‘s incorporation of hemp into various agricultural blocs suggests federal endorsement. Hemp producers can now access the Environmental Quality Incentives Program (EQIP) and the Value-Added Producer Grant (VAPG) programs. These programs aim to improve the financial standing of hemp farmers in the eyes of lenders, which… helps.  

Pennsylvania HEMP Mortgage Guidelines: State-Level Initiatives

Pennslyvania’s Next Generation Farmer Loan Program allows for tax-exempt financing that lowers the interest rate for farmer capital purchases, including equipment and farmland. This funding isn’t catered specifically to hemp farmers, but compliant farmers can use it, which helps them obtain mortgages more easily.

Changes in Lending Policies

With the development of the hemp industry and the legalization of several governing policies, more and more institutions are changing their policies to accept income associated with hemp farming. Lenders noticeably accept hemp farming, easing the conditions for qualifying for many mortgages.

The Latest on Pennsylvania Hemp Mortgage Guidelines for Farmers

Here are the things to remember in 2025 when hemp farmers in Pennsylvania seek a mortgage.

Pennsylvania HEMP Mortgage Guidelines: Permit

A valid hemp growing or processing permit from the PDA is required. This permits the legitimacy of the operation’s business to be recognized.

Pennsylvania HEMP Mortgage Guidelines: Financial Records

Organized financial statements that are transparent, well-defined, and comprehensive significantly increase the chances of securing a mortgage. Pennsylvania hemp farmers should gather all documents for income and expenses segregated and associated with the farming activity.

Educated Lenders

Use the services of banks and other lending institutions with a working knowledge of the hemp industry and regulatory policies surrounding it. Understanding the hemp regulations enables lenders to appreciate and correctly interpret your income sources.

Pennsylvania HEMP Mortgage Guidelines Monitoring Resources

Check PDA and USDA websites as changes in policies and programs emerge and correlate to your eligibility for a mortgage.

Progress in the hemp industry in PA has recently created a more beneficial environment for farmers seeking mortgage financing. There also seems to be a change in attitude from lenders where income from hemp is more readily accepted in mortgage calculations due to state and federal backing. Farmers can now secure the appropriate permits, organize their finances, and work towards getting mortgages efficiently with the policy changes.

Caution: This guide was written based on information as of February 2025. For the most up-to-date programs and policies, check the Pennsylvania Department of Agriculture and the United States Department of Agriculture.

Pennsylvania HEMP Mortgage Guidelines Now Legalize Income By HEMP Farmers

Pennsylvania recently made an announcement regarding its policies and the hemp industry. Farmers can now qualify for a mortgage since HEMP is now legalized in the state of Pennsylvania. This is because illegal income could not have been used for mortgage income qualification. With the legalization of HEMP by Farmers, they can now use income derived by farming HEMP as qualified income. We are writing this blog in light of the Federal Agricultural Improvement Act of 2018.

New Law Into Effect For HEMP Farmers And Income Derived By HEMP-Related Products

The Pennsylvania Department of Banking and Securities, as well as the Pennsylvania Department of Agriculture, is providing clarification on providing banking services to the industrial hemp business. We now know this as the 2018 farm bill, which removed Industrial Hemp from regulation under the controlled substance Act and provides commercial production. This is a huge improvement, and hemp is now covered under the federal crop insurance program.

Pennsylvania HEMP Mortgage Guidelines: Banking Relief For HEMP Industry

This federal act removes additional hurdles concerning state-legalized hemp programs and now allows banking relationships and commercialization. The statutory changes put in place by the farm bill now offer greater Clarity around the treatment of industrial hemp by Financial organizations. Given the changes on the federal level, Pennsylvania is now rescinding prior specific guidance on Industrial Hemp. Most importantly, Banks and Credit Unions can more easily service industry and should continue to employ prudent risk management and comply with all state and federal banking requirements. In short, mortgage companies may now treat the hemp industry just like any other industry in America

This is an important announcement for an industry that will be increasing over the years to come. Many banks have been hesitant due to federal law. the Farm Act is federal legislation, and we expect more states to make announcements such as this announcement from Pennsylvania. For any questions regarding Industrial Hemp, or any mortgage-related questions, please contact Mike Gracz at (800) 900-8569 or text us for a faster response. Or email us at gcho@gustancho.com. 

FAQ’s on Pennsylvania HEMP Mortgage Guidelines

Are hemp farmers eligible for a mortgage in Pennsylvania?

Yes, hemp farmers in Pennsylvania can obtain a mortgage. Still, they must fulfill certain lender criteria, including proving they earn an income, offering other relevant documentation, and possessing a valid hemp growing permit from the Pennsylvania Department of Agriculture (PDA). Some lenders have become more accepting of hemp-related income, especially as regulations have become clearer. In special cases, some lenders are more forgiving when accepting permit income.

Can I consider income from hemp farming for a mortgage application?

Yes, most lenders will consider a hemp farming income as long as it is legal and properly documented. Farmers must provide income verification documents like tax returns, bank statements, and profit/loss documents. Some traditional lenders may still be reluctant, so work with better credit unions and banks who understand agricultural lending.

Can I use the profits from hemp farming for my home’s down payment?

Yes, most of the time. However, the income used for a down payment must always be documented. Farmers must also make sure their income and financial documentation and records comply with the overwhelming banking and lending industry so that there are no issues with mortgage underwriting.

Are farmers planting hemp eligible for government-funded loans like FHA, VA, or USDA?

Yes, but there are unwritten restrictions. Overseers of rural development loans have slowly accepted hemp farming as an agricultural practice. Nonspeculative FHA and VA loans can still be problematic because they depend on the issuer. It’s best to contact the individual loan programs and issuers for their specific guidelines.

Are there any mortgage products available to hemp farmers in Pennsylvania?

In Pennsylvania, hemp farmers have access to multiple mortgage products like:

• Conventional Loans can be sourced from private lenders, banks, and credit unions.
• USDA Loans: These are for qualifying rural domains, but acceptance of income from hemp is inconsistent.
• FHA Loans: With an FHA-approved lender who prefers to accept income from hemp.
• Farm Credit Loans are available for agriculturist lenders who finance farms and rural properties.

Pennsylvania HEMP Mortgage Guidelines: Do Lenders in Pennsylvania That Lend to Hemp Farmers Exist?

Some lenders specialize in agricultural financing and have worked with hemp farmers. Examples include Farm Credit institutions, certain agricultural banks, and some credit unions aware of the hemp legislation. It’s best to speak with lenders specializing in financing farms and rural property.

Pennsylvania HEMP Mortgage Guidelines: What Documents Do I Need to Apply for a Mortgage as a Hemp Farmer?

To maximize their chances of gaining access to a mortgage, hemp farmers should prepare the following documents: a current Pennsylvania hemp growing permit, Tax returns, generally two years’ worth, Bank statements indicating income from the sale of hemp, Profit and loss documents indicating revenue from their hemp business, and Evidence of compliance with state and federal laws concerning hemp.

Pennsylvania HEMP Mortgage Guidelines: Will Mortgage Rates Be Higher for Hemp Farmers?

No, not always. Rates vary based on many other factors, such as credit score, down payment, type of loan, and lender policies. Some lenders consider growing hemp a risk and charge higher rates. Other lenders will give the standard mortgage rate if the borrower meets the qualifications.

How has Pennsylvania changed its hemp mortgage guidelines since 2019?

Through the PDA, Pennsylvania established clearer policies governing hemp farming in 2022-2023. Farmers have started to gain more access to lenders as they become more willing to work with hemp growers. Through the USDA, the federal government also broadened the scope of financial support available to help farmers, making mortgages easier to obtain.

What Challenges Would Hemp Farmers Encounter While Trying to Obtain a Mortgage for Their Farms?

Some of the challenges are:

• Locating a lender who would understand and accept hemp income.
• Having a stable and legal income is important.
• Having to interpret federal and state banking laws, some banks are still hesitant about hemp financing.
• Satisfying the rigid criteria for the mortgage like credit score, debt-to-income ratios, etc.

In What Sequence Should a Hemp Farmer Start Preparing to Get a Farm Mortgage in Pennsylvania?

• Study your potential lenders: Look for banks or credit unions that will take on the risk of lending to hemp farmers.
• Gather appropriate documents: Ensure that your income and tax documents will pass scrutiny.

Check whether you qualify for some government assistance programs. For example, I will examine the possibilities of the USDA and farm loan program.

Pennsylvania HEMP Mortgage Guidelines: Ensure You Abide by the Regulations

You must possess appropriate permits for hemp farming and conduct business within federal and state law.

Where do I acquire further materials about laws related to hemp farming in Pennsylvania?

For the latest news concerning hemp farming laws and other financial offers, take a look at:

• Pennsylvania Department of Agriculture (PDA) – www.agriculture.pa.gov
• U. S. Department of Agriculture (USDA) hemp program – www.usda.gov
• Farm Credit Services – www.farmcredit.com

With the right information and the correct choice of lenders, Pennsylvania hemp farmers can master the mortgage process and use the funds to purchase homes and farms.

Pennsylvania HEMP Mortgage Guidelines

Growers and producers of industrial hemp in Pennsylvania can visit the Pennsylvania Department of Agriculture’s website for more information or contact their Bureau of Plant Industry at 717-787-4843.

This guide on Pennsylvania HEMP Mortgage Guidelines was updated on February 20th, 2025.