Land Financing Options

Land loans aren t as common as mortgage loans so there are fewer options.

Land financing options.

Financing a land purchase may be more complicated than the traditional home mortgage process but you shouldn t feel discouraged. Several loan options are available depending on your credit income and assets. To speak to a mortgage representative call 1 800 580 3300 select option 3 then option 2. You can finance raw land but lenders may be hesitant unless that s typical for your area for example some areas rely on propane wells and septic systems.

If you are shopping for a land loan the first place to start is with a local bank or credit union. A buyer who purchases land through owner financing essentially uses the seller as a bank making payments over time to cover the cost of the property. Pros of buying land with owner financing. Land loans are significantly different than home or commercial mortgages in terms of financing options costs and even finding a lender.

Local is key here because as part of the community the lending institution will have a better idea of the value of the land you are planning to purchase. It s expensive to add things like sewer lines and electricity to your property and there are numerous opportunities for unexpected expenses and delays. Local lenders also have a vested interest in the growth and. A land loan allows you to purchase a lot and stake your claim before you ever begin to think about construction alleviating a few of the unknowns that can come along with a new home build.

Find other landowners to talk to for advice and discuss your options with potential lenders. And you could face with a bigger down payment requirement a higher interest rate and less time to repay the loan than. There are many ways to get land loans but it can be difficult to figure out which one is the right fit. 2 buying land with owner financing.

Fsa makes direct and guaranteed farm ownership and operating loans to family size farmers and ranchers who cannot obtain commercial credit from a bank farm credit system institution or other lender. If the buyer fails to pay the seller can foreclose on the property. Financing a land purchase requires a lender that understands how land sales work and is willing to take on the risk.