But new demographics have brought the banks new opportunity. They've found a valuable business in financing acreages used for residences and a rural lifestyle. The business comes from both people who have spent their lives in the country and those who are new to these open spaces.

AgFirst of Columbia, S.C. (www.agfirst.com), is among the several Farm Credit System institution banks that actively court a lending business where land supports a lifestyle, not a farming business. In AgFirst's case, it is their "Country Mortgages by Farm Credit" program. This program has fixed and variable-rate interest products similar to what a person would use to buy any home or farm.

"Most of the purchases of 10 acres and up we seem to get first dibs on because many commercial banks won't touch that," says Bill Miller, branch manager for AgFirst in Graham, N.C. The bank does business in 15 states in the East and Southeast.

It's not that commercial banks won't finance acreage purchases—they do. But these kinds of acreages are hybrids. They are not known quantities, not like homes in town or land for straight-up commercial farms. "There's a whole lot more perceived risk there," says Miller.

In the Farm Credit System's case, there is a bit of gray area; the land must be considered agriculturally able to produce something in the way of income—if they are to make a loan.

E X T R A: What About an Auction?

"Under our regulations, we are able to finance people who own agricultural land," says Joy Upchurch, AgFirst's vice president for marketing and bank services. "It has to be available for the production of ag products. It doesn't mean you have to immediately be growing those products."

The commercial banking side competes for the same business. Gone are the days when rural lifestyle borrowers suffer financially for their move. Mortgage terms and loan rates mirror those offered for property in town.

"Ten years ago if someone wanted to buy a house and acreage as their primary residence, we couldn't finance more than 10 acres if they weren't farming," says Charles Aug, chief operating officer and senior vice president of F&M Community Bank in Preston, Minn. "Now 40 acres is just fine."

You'll find evidence of the new pioneers in Preston, a hilly, scenic community in southeast Minnesota. The area supports commercial agriculture. But demand for homesites with land is fueling a burgeoning lifestyle market.

"The majority of our new construction loans are for homes in the country—not in town," Aug says. "That's where the people want to go."