Financing lots and pieces of land is different than most traditional financing methods used for buying structures (ie stick built homes, manufactured/modular homes, etc). Most of the lenders and brokers out there who do finance land (see some examples below) hold the notes themselves in their portfolios.
Types of Loans:
Many lot and land financing programs are short term loans which may have a balloon payment which becomes due after a defined number of years (often 3 to 10 years). Some lenders and banks offer adjustable rate solutions as well. Prior to the real estate market collapse in the early 2000′s, many lot and land loan providers left the market in search of “safer” lending practices. Today, it can be more difficult to find companies willing to lend on land. With that being said, they are out there.
Another option might be contacting local banks and credit unions. These institutions are interested in more than just loaning you $50K for a piece of earth. They also want your deposits and investments. Thus, they may consider lending on your lot if it gets you in their door. There are also some large lenders out there that offer lot loans including Wells Fargo and 5th Third Bank. You might want to check out their web sites to see if they might have a product that might work.
Solutions for Financing Lot and Land Loans:
- You may want to consider doing a cash-out refinance or equity line of credit on your primary residence to finance the lot. If this option is economically feasible, you may end up with a lower rate and payments, and a more extended payment term than you could not get with a traditional lot or land loan.
- Speak with your local bank or credit union. Some local lenders still offer lot loan financing because they will portfolio the loan. This means they keep the loan themselves and do not have to sell it.
Some Lot Loan Lenders to Check Out
GreenStone Farm Credit Services – website
Offering recreational land loans for enjoying the great outdoors.
According to their website, GreenStone offers land loans for recreational uses. Hunting, fishing, hiking and camping are just a few of the fun activities you could take advantage of with one of their recreational land loans. They offer flexible financing for small to unlimited acreage as well as 30-year amortization terms to keep payments manageable.
Alpine Mortgage – website
Specializing in providing lot and land loans for all types of properties and purposes.
Alpine Mortgage offers a wide selection of land loans for a broad scope of purposes. From land equity loans to raw land loans and more, this east coast-based mortgage company has something for just about anyone looking to invest in undeveloped land.
Florida office: 800-876-5626
New Jersey office: 201-488-8809
Texas Land Bank – website
Find competitive rates on a variety of Texas land loans.
Not only does Texas Land Bank offer a variety of loans for undeveloped land, they can finance other useful necessities such as farm and ranch equipment, vehicles or any other capital. With locations throughout Texas, including Dallas, Waco, Hillsboro and several other cities, Texas Land Bank is a convenient choice for borrowers in the Lone Star State.
These are just a few select lenders that offer land loans. You can learn more about lot and land loans on ForTheBestRate.com. You may also want to check with local banks and credit union in your market to see what products they offer.
Are There Stated Income Loans for Lots?
There was a time around 2004-2007 where borrowers could find stated income lot loans. We recall at least one major lender who offered a stated lot loan product. Shockingly enough (wink, wink), that lender no longer exists in its previous form. Like many stated income loan products of its day, many borrowers and lenders bit off more than they could chew leading to high foreclosure rates and tightened lending guidelines. To the best of our knowledge, no lenders are offering a residential stated income lot loan program.