Kickstart Your Land Investing Journey With Land Grants

Land grants have been around since America’s early dbuays. Historically, land grants facilitated westward expansion, supported public education, and funded infrastructure projects, significantly contributing to the nation’s economic growth. Today, they help land owners obtain parcels for farming, saving nature, or helping communities. If you can’t get a loan to buy land, a federal government or nonprofit land grant might be the answer.

Key Points

• Land grants helped build America and still help communities today
• There are three main types: Private Grants for people, Public Grants for schools and groups, and Grants with strings attached
• Groups like USDA and HUD give grants to help farmers and communities
• FSA loans provide financial resources to farmers and ranchers who struggle to secure commercial credit. These loans support various farming needs, including purchasing land, livestock, equipment, and covering operational expenses, while also targeting assistance for beginning farmers and historically underserved producers.

What Are Land Grants?

Land grants started gifts of land from a government or other entity. In the United States, the federal government used grants to encourage people to settle in and around the country after the American Revolutionary War. People got free land if they built a house or farmed it. This helped America grow west. Land grants also worked to promote special interests that supported or developed communities. That includes gifting lands specifically for universities, research centers, or vital infrastructure. The 19th century relied on grants to build railroads and schools in rural areas.

Today, land grants still function but in slightly different ways. They now focus on meeting community needs, saving critical natural areas from development, and promoting economic stability in communities through sustainable growth.

The federal government often gives these grants, but nonprofits and private donors do, too.

How Land Grants Work

A famous example of how these grants worked is the Homestead Act of 1862, which gave settlers up to 160 acres if they farmed it. Railroads also got over 100 million acres from the government to build cross-country train lines. This helped with rural development.

Land grants still shape how people get land for farming or building vital infrastructure for communities today. Additionally, land grants now target saving lands in urban and rural development from encroaching development. 

The main difference between grants and loans is the expectation of payback. A grant is a gift of funds to purchase land or a gift of the land itself. The receiver of the gift doesn’t pay a dime out of pocket. It’s the cheapest way for beginning farmers to gain land–for free!

A loan charges interest, even at a low rate, and expects its amount to be repaid over time. When looking to obtain financing, you may hear about loan guarantee programs. These are still loans, but in the case of borrower default, a third party repays the loan. For America’s agricultural producers, seeking a loan guarantee program from the USDA means the government will repay the loan.

Types of Land Grants

There are three main kinds of land grants:

1. Private Grants go to people, companies, or government entities to help with building projects or farming. Nonprofit organizations can partner with entities like land trusts to secure land for various beneficial purposes, including conservation and community development efforts.
2. Federal Grants go to schools or nonprofit organizations for teaching and research or infrastructure projects. Over 100 colleges were established through public land grants, including the Massachusetts Institute of Technology (MIT) and The Ohio State University.
3. Grants with Conditions come with rules about how the land must be used, such as for farming, teaching, or preserving nature.

Federal Land Grants

Federal land grants pay for essential farming, housing, and community growth projects. Agencies like USDA and HUD run these grants.

Other Federal Government Programs

Besides grants, the USDA’s Risk Management Agency oversees providing sound risk management solutions, including operating the Federal Crop Insurance Corporation. It develops and offers insurance services for livestock or crops, while supporting sustainable and organic producers. FCIC runs educational outreach to support farmers’ economic stability.

The Farm Service Agency (FSA) loans money directly to farmers who have trouble getting bank financing or commercial credit because of the high business risk associated with farming. This helps farmers buy the land and tools they need. Its financial resources are for purchasing land, livestock, equipment, and covering operational expenses. The USDA also has direct loans and other programs through the FSA.

Taking time to learn what a grant requires and what it aims to do makes applying easier.

USDA Land Grants for Farmers and Ranchers

The USDA provides loans and grants to help farmers buy land, improve farms, and grow rural areas. This help support farmers who can’t get regular bank loans. The Farm Service Agency runs loan programs for purchasing land, including government-owned land that beginning farmers have the right to purchase first. Its grant programs include funds to grow specialty crops, research new agricultural products, or open farmers’ markets. 

Some agency targets include helping beginning farmers, while others support farm improvements or innovative agricultural research. New farmers benefit from guaranteed farm ownership loans that assist in purchasing land and equipment.

Under its Rural Development program, grants assist with funding housing, businesses, and infrastructure development in rural America.

Who Can Apply

To get USDA grants, first find the program targeting your needs. The USDA has a long list of potential funding and loan programs. For a farm grant, be ready to show you know how to farm or ranch. You must develop a good plan for running your farm or ranch well. Additionally, applicants must demonstrate that they have tried to obtain commercial credit from traditional banking institutions before applying for USDA grants.

How to Apply

To start applying for USDA grants, first check if you qualify as some grants have narrow criteria or designate specific funding purposes. After making sure you are eligible, gather all needed papers like business plans and money statements to back up your application. Additionally, consider contacting other appropriate state agencies that can assist in the application process. Some agencies partner with State Departments of Agriculture to leverage matching grant funds for projects aimed at enhancing market opportunities for food and agricultural products.

Community Land Grants

Community land grants, or community land trusts (CLT) help local projects like making affordable homes and saving important land. CLTs create affordable housing, support local agriculture, develop community-serving commercial spaces, and protect rural and urban green spaces. Community land grants give people in that community more say in how their land is used.

Many nonprofits focus on helping communities grow by funding chances to buy farmland or urban land for preservation or development. 

HUD Community Development Block Grants (CDBG)

The Department of Housing and Urban Development (HUD) runs the CDBG program. Its funds help local governments buy land for public use and affordable housing projects. This money covers buying property, fixing buildings, building key public structures, and assisting eligible families with rental assistance.

CDBG funds are meant to improve living conditions and community buildings, mostly for people with low—to medium-incomes. These funds support housing assistance and home improvements.

State and Tribal Land Grants

State and tribal land grant programs aim to grow the economy or protect nature by supporting community-led projects. Among them are grants to purchase historically relevant lands, land for agricultural education or research, or caring for the environment on lands with deep family history. Among these, the 1994 Land Grants support schools and their research, plus farming. Each state has a different approach to any land grant programs; some have none for individuals to purchase land.

Conservation and Environmental Land Grants

Conservation and environmental land grants help protect diverse and vital ecosystems. The grants are used to buy or set up conservation easements, which promote using land in ways that last.

These grants also provide cost-share assistance for conservation work, helping landowners manage expenses for sustainable practices. These include new ideas to reduce farming’s negative effects.

Through its voluntary programs, like the Environmental Quality Incentives Program (EQIP), the National Resources Conservation Service (NRCS) gives money and expert advice to property owners committed to managing resources in ways that last. EQIP plays a key role by weaving conservation into farming methods.

To qualify for these programs, you often need to work with a USDA-accredited certifying agent to ensure you follow the rules.

NRCS Financial Assistance

The Natural Resources Conservation Service (NRCS) supports conservation work through many programs. The money targets buying conservation easements and saving land, emphasizing management methods that have meaningful and lasting impacts.

These programs aim to boost environmental health and make farmland more productive, helping land owners and the community through supported farming projects. Additionally, NRCS programs provide expense subsidies for sustainable practices so farmers can adopt and maintain these methods without financial strain.

The Conservation Fund

The nonprofit organization The Conservation Fund (TCF) builds partnerships that support conservation in rural and city areas. Providing revolving funds and expert advice, the fund helps buy land, runs matching fund programs, and promotes growth projects that last. These matching funds are often used in grant programs to support agricultural initiatives and healthy food programs.

Educational and Outreach Programs

The 1862 Morrill Act started land grant colleges that focused on practical education in farming and mechanics. Over time, these schools expanded to include extension services that focus on ongoing learning in agriculture. 

These land-grant schools connect agricultural research with local community needs through outreach programs. The programs give farmers access to advice and resources based on solid research. Extension offices promote best practices. Direct and guaranteed loans provide necessary funding for these forms of agricultural education and outreach.

Land grant schools help America’s farmers implement farming methods that increase yields and healthy soil by supporting research on new ideas.

Additionally, the USDA sponsors educational programs for farmers and landowners, including beginning farmers who are new to the agricultural sector.

Private and Nonprofit Land Grants

Private grants usually have less paperwork than government ones, making them easier to get for community projects. Communities use these private funds to reach their growth goals more efficiently. For the donor, a land gift comes with tax incentives.

Groups like the Land Trust Alliance help nonprofits and land trusts get land through grants and partnerships. In this case, the work focuses more on acquiring land for conservation than economic development.

Private grants support multiple aims based on the organization’s goals. They give funds to community-supported agriculture programs, helping expand domestic farmers markets, and direct farmer-to-buyer selling. 

Finding Grants

Grants.gov lists many funding options. Knowing what federal land grants exist and how to get them helps people who want land for farming or community projects. These grants offer money help and support bigger goals like steady growth in communities.

The USDA lists all its grants and loan programsfor farmers and ranchers. It includes the Rural Development operating loans and matching grant programs in the Federal-State Marketing Improvement Program.

The Land Conservation Assistance Network (LCAN) compiles information on federal and state land grant programs.

Tips for Successful Grant Applications

Write a grant proposal clearly showing why your project matters. Explaining the specific needs helps funders understand the importance of meeting your funding needs. A story presenting the problem and solution well can make your application stand out.

Making your proposal stronger with measurable results, like how many people you’ll help or how much land you’ll improve, makes it more convincing. Showcase targeted research that enhances the efficiency and performance of your project. 

Presenting an exact and doable budget shows how you plan to pay for the work while managing costs well. Consider any proposed tax breaks for the cost of the work to show you’re committed to achieving the grant objectives in a financially responsible way. Explain why commercial credit sources or other loans can’t cover the financing or how the grant will expand what you can do with the operating loan.

Building relationships with possible donors before applying may give you valuable feedback and improve your application. Getting expert help can boost the quality of your proposal, increasing your chances of getting funding. 

Can You Buy or Sell Land Grants?

Buying or selling land grant property is complicated and involves many legal issues. Because of these complexities, purchasing land through a grant often requires significant fundraising efforts. Nonprofits use capital campaigns to target major donors and sponsors. 

Even gifts of land, while they have tax incentives, may bring up some challenges for the receiving entity and donors. 

However, there are markets for some types of land grants, especially those linked to conservation easements or community development projects. Some nonprofits sell the land they are gifted as a way of raising funds to achieve their mission.

Understanding Land Grants

Land grants allow people, nonprofits, and communities to acquire land for various purposes, including farming, conservation, and community development. They encourage research, grow speciality crops, and construct buildings essential to the community’s growth.

These grants benefit the entire community by fostering collaboration among individuals, organizations, and nonprofits. Take advantage of land grant opportunities and take the first step toward making your vision a reality.

Frequently Asked Questions

What are land grants?

The government gives land grants to people or groups for specific uses, like farming, conserving nature, or helping communities grow for low-to-moderate-income rural Americans. This approach is used to support various social and economic goals.

Who can get USDA land grants?

The USDA doesn’t give grants to purchase land. But through its grant programs, it does help with technical assistance, innovation aimed at boosting yields and production, and financing vital improvements to the land. It’s an intermediate measure for ranchers and farmers who can’t gain funds from a Farm Credit System Institution or commercial credit sources. Be ready to present a solid plan for managing your farm or ranch.

How do community land grants help local development?

Community land grants help local development by giving land access to groups that address community needs. These grants and trusts support affordable housing, public spaces, and local food systems. This access helps communities thrive economically and socially.

Can land grants be bought or sold?

Land grants usually can’t be transferred like private property because of the specific conditions attached to them. However, some exceptions exist, particularly in cases involving secondary markets for conservation easements or community development projects.