Traditional Land/Lot Financing

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Hi All,

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.

In general:

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.


Scott Miller