01 · Water source and reliability
Describe the water the property can actually use.
Note whether water comes from a well, spring, stream, reservoir, municipal system, irrigation district, ditch company, or another source. Gather available records about permits or licenses, allowed uses, seasonal availability, delivery limits, water quality, operating costs, and recent interruptions. For an agricultural operation, explain which crops, livestock, household needs, or improvements depend on that supply and how the operation responds when water is limited.
Water value and availability are not measured the same way everywhere. USDA’s Economic Research Service describes differences among regions in water rights, institutions, markets, and transfer infrastructure. A pump, canal, or irrigation system by itself does not establish what water may legally be used or whether a right transfers with the property.
Sources: USDA Economic Research Service
02 · Rights, permits, and easements
Check which rights attach to the parcel and which are separate.
Compare the deed and title materials with the available water-right, permit, well, district, or ditch-company records. A water interest may be tied to land, separately recorded, subject to a permit or membership agreement, or governed by other local arrangements. Ask whether it may be used for the property’s intended purpose and what approvals or steps may be needed to transfer, renew, or continue it. State and local rules matter; do not assume a right follows the deed or can be transferred just because the property has irrigation equipment.
For each recorded or written easement, locate the document and identify the parcels and parties it covers, its permitted purpose and route, its duration or renewal terms, and who is responsible for access, repairs, and costs. These are useful questions for a title professional or attorney; a general guide cannot interpret a particular easement or establish its legal effect.
Sources: USDA Economic Research Service
03 · Irrigation and property review
Separate the equipment from the water rights and access.
List pumps, wells, pivots, pipes, ditches, storage, meters, and other irrigation improvements; note who owns them, their condition, maintenance needs, and operating costs. Explain which water source and permissions each system depends on. This helps a lender or evaluator understand the property, but it does not mean each item will be accepted as collateral or assigned a particular value.
Farm Credit Administration guidance says Farm Credit institutions evaluate real, personal, or intangible property taken as collateral under FCA regulations and the institution’s own policies. That framework does not set one treatment for every water right, irrigation system, or easement, and it does not establish requirements for every lender.
Sources: Farm Credit Administration
04 · Program rules and preparation
Ask the lender which rules apply to this request.
Some programs identify specific water- or easement-related uses. For example, USDA Farm Service Agency materials list easement purchases and soil and water conservation among potential Farm Ownership loan purposes. That program description is not a universal lender checklist or a finding that a borrower, property, water right, or project qualifies. Confirm current eligible uses and documentation with the program or lender handling the application.
A useful starting file may include a parcel map and legal description; deed, survey, title report, and easement documents; water-right, permit, well, district, or delivery records; irrigation equipment details and repair history; and relevant production or water-test records. Ask whether water rights, easements, and equipment are included in the review, how ownership and transferability will be confirmed, and what additional records or inspections are required. Requirements depend on the property, jurisdiction, lender, and program.
Sources: USDA Farm Service Agency, Farm Credit Administration
Agency and reference materials
Read the source material directly.
These materials provide research context and describe specific agency or Farm Credit practices. Confirm current requirements with the lender or program reviewing a particular request.
USDA Economic Research Service
The Agricultural and Environmental Value of Water
Research overview of agricultural water valuation, regional differences in water rights and institutions, and the role of transfer infrastructure.
Open official sourceFarm Credit Administration
Collateral Evaluations
Guidance on collateral evaluations for Farm Credit institutions, including real, personal, and intangible property and institution-specific policies.
Open official sourceUSDA Farm Service Agency
Farm Ownership Loans
FSA overview of its Farm Ownership loan programs; eligible purposes and applicant requirements are program-specific.
Open official source