We are looking at purchasing a single lot for building our home. We would like to buy the lot now and build later. What are traditional financing options for acquire a lot? e.g. 30yr term w/20% down or something different?
Thanks in advance.
In the absense of knowing whether you are buying a lot that has already been subdivided or if it is undeveloped raw land, acreage, etc., it difficult to give you precise response.
a. There are land lot loans (for residential lots) that allow for up to 90% financing (90 LTV); general guidelines are:
- mid FICO of 660
- willingness to go FULL DOC
- A debt to income not to exceed 45
- A max. loan size of 400K
- 6 mohths of reserves required
- Up to 10 acres allowed
b. If the lot is unimproved, there is a high likelihood that you will need to consult a hard money lender for financing.
c. Please be advised that there are combo loans that allow for (I realize you intend to buy and hold before construction):
- Land purchase and construction costs rolled into one loan.
- Land purchase, construction costs and permanent financing rolled into one loan.
Hope this helps.