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Vacant Land
No Housing Structures / No Slabs etc.
Purchase only
Land Appraisal
60 days seasoned assets
Full Doc, Bank Statement or P&L … only one year income required
240 months term
660 min. score
65 LTV
Trans Union single repository credit report
Allows a non-occupying co-borrower
$100K min. loan amount
$154K min. purchase price
$825K max. loan amount
No Prepayments
No Insurance
No gift funds
No reserves
Gift of Equity allowed … case by case
- Direct family member
- 100% of the down payment in a gift of equity but needs 100% of the closing costs
- Employed over two full years
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This discussion was modified 1 year, 2 months ago by
Felix.
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4 Replies
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This product is extremely stringent to their guideline
There are NO exceptions or variances.
Due to this product being considered Non-QM O/O, it falls into State Restrictions, TRID and High Cost guidelines!
This particular product is a portfolio product that requires a board to review due to the nature of this product, which may cause delays in turn time -
Thank you Felix for the post about financing terms for vacant land!! Yes we do have financing for vacant land!! If you have ever tried to get a loan for vacant land in the past you know it has been next to impossible. For years I would get calls on financing vacant land and could only do it if it was an investment property. Having financing now available is a game changer! If you are trying to sell your vacant land you can let your buyers know we can help with financing . Check out the article below for some pointers. https://onesolutionrealestate.com/uncovering-the-reasons-why-is-my-land-not-selling-despite-being-listed-for-sale/
onesolutionrealestate.com
Uncovering the Reasons: Why Is My Land Not Selling Despite Being Listed for Sale?
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Great article, Ronda. There are many creative ways of doing ground-up construction on vacant land. The end buyer can do ground-up construction with an experienced builder by setting up an LLC partnership and taking buying the builder out. We can now do 100% loan-to-value on ground up construction on both the acquisition and land. That is 100% loan-to-value with no money out of pocket. You need to have built three to four ground up new construction homes and needs to have an after completed loan to cost and loan to-value of 65%. We can make an exception up to 70% loan-to-cost and loan-to-value for experienced home builders. Contact Ronda Butts at ronda@gustancho.com.
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Let’s talk more about the financing and purchasing a vacant lot in the form of a FAQ.
Financing and Acquisition of Vacant Land FAQ
What financing methods are possible to buy vacant land?
Land Loans: This allows land purchase using collateral and even with the needed documents alone.
Conventional Loans: Some financial institutions extend added conventional loans to allow the purchase of land, but the downpayment is high.
Owner Financing: Sometimes, the seller will allow you to buy their land using a payment plan.
Home Equity Loans: If you own a house, you can also use a home equity loan to buy land.
Are there standard criteria that individuals can use for the land they buy?
Based on the financial institutions and the types of loans offered by them, there exists a wide range of figures, which typically average between 20% and 50% of the property.
Is it easy to acquire a loan to purchase an unused plot of land?
There are financial institutions that will allow clients to purchase land that is not buildable. However, it will require a higher downpayment or provide approval for a strong credit score.
What should one do or check before going forward with the purchase of the plot?
Zoning Laws: You do not want to purchase land that cannot be used, so you must check the zoning of the property.
Availability of Utilities: Take note of the existence of water supply, accessible power, and sewage.
Environmental Regulations: Seek any environmental law that could impact the land use.
Zone and Real Estate Trends: Analyze the future return on investment for the geographical location researched.
What are the recurrent expenses a person incurs from owning an undeveloped parcel of land?
Land Taxes: Taxes on land will remain due irrespective of whether the parcel is not being developed.
Land-Managing Costs: This broad category comprises pushback lumber, road-making to access the land, and controlling fence incursions.
Insurance: Getting some form of insurance that protects you from the possible litigation arising from negligence is advisable.
How do I go about evaluating the price of an empty lot?
CMA: Check out recent purchases made on the same class of properties in the region.
Appraisal Expert Services: Find an estimator; however, it should be someone certified by the law.
Commercial Real Estate Valuation Calculator: Use other venues or tools that give property values based on previous sales in the area.
Land can be a good investment, but what are the possible downsides?
Economic Situation: The land cost will likely change depending on the prevailing economic situation.
Infrastructure Development: Land development issues could arise because of building requirements or the surroundings.
Loan Issues: It’s mostly difficult to get a loan for undeveloped land than for a house purchase.
What things do I have to consider before placing a bid for an empty piece of land?
Background Checks: This includes looking into the zoning, purposes of the land, and more.
Obtain Land Maps: You must be completely aware of your borders and easements.
Hire Professionals: Work with realtors, lawyers, and investment agencies seeking help.
Please ask me for any additional information if you wish.