New Build - Seller Land Finance

[Chris Maeder]

I have $200k cash for a $650k project to purchase land for $200k and build a $450k vacation home. The land I am considering is $200k and owned by a private association. I would like to request seller financing/deferred payment for the land which has been vacant and on the market for over a year. I would offer $40k down payment and pay the balance of $160k to the association when construction is complete and I obtain a permanent loan. The association will have assurance that the land is sold and they will receive 1% annual assessment going forward.  This structure would allow me to conserve $160k cash for the construction phase and borrow only $290k rather than the full cost of construction. 

Would I be able to obtain a construction loan for $290k without owning land outright?

I have never used seller financing but think this is an ideal situation to make a request and welcome any suggestions or feedback!