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Expert
Posts: 1549
  
Location: Southwest Louisiana | We've had these 20 acres for several years now. We moved a mobile home onto it a few years ago and now we're ready to build. Suprise! every bank we talk to won't finance a new construction loan and 20 acres of land. They'll split it and finance an acre or two with the house, and give us a seperate note for the remaining land. Is there a place that doesn't do this? We can afford both notes, but I find it kind of ridiculous to have 2 loans like this.
Edited by Rocket'sMagicGirl 2014-01-18 4:22 PM
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 Elite Veteran
Posts: 984
Location: Southwest Minnesota | We had the same trouble buying an acreage a few years ago. The bank didn't want to finance because there was a 10 acre corn field on the property so they called it agricultural. Went to an ag lender and about got laughed out of their office. We ended up getting a loan on the 6 acre building site from the bank and owned the 10 acre field free and clear. If I remember correctly the courthouse had to give us seperate deeds for the property. It was the dumbest thing ever! |
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 Accident Prone
Posts: 22277
 
Location: 100 miles from Nowhere, AR | We had to survey out 9.something to go with our house to get a loan. We owned the land free and clear tho, so it wasn't a huge ordeal except for having to come up with the cash for another survey at the last minute. |
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Extreme Veteran
Posts: 448
Location: lone star state | There is a federal law to do with a homestead. My dad is a banker I can ask the specifics but it has to do with the federal banking law that the bank is bound by.
I also know that January 1 more federal laws went into place making it much more difficult to borrow money to build or borrow to purchase a home.
The American dream of owning a home is slipping away from middle class people. You will have to save and dream longer to own a home. |
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Elite Veteran
Posts: 629
Location: Roping pen | Might try:
http://www.firstsouthfarmcredit.com/locations.aspx
I know we do these requests all the time in our district.
Good luck!
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 Worst.Housekeeper.EVER.
Location: Missouri | I thought this was pretty standard? We are in the process of getting our plans together, but we talked to the bank months ago and planned to do seperate loans. Our banker did tell us that once the construction was completed, we could refinance and possibly get everything on the same note.
eta: I'm sure you already know this, but a construction loan is not the same as a conventional loan. From my understanding, you will have to refinance or roll it over to a conventional loan after the 6 months or year (however much time they will give you), which is when we will try to have everything put together on one loan.
Edited by just4fun 2014-01-19 10:36 AM
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 I Love My Mares!
Posts: 1613
Location: Moved to Montana | The problem is by putting a house on 20 acers you are not increasing the value by as much as you are trying to borrow. So if you were to default an the land and house went to the bank they would not recoop their investment in a sale. There is a bigger market for a house on 5-10 acers so the bank would have a better chance on that. Also are you trying to finance the whole project or do you have some saved for it? |
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Expert
Posts: 1549
Location: Southwest Louisiana | We do have some to put down. The amount the house and land appraise for is well above what we are borrowing for it, less than 85%, so none of the banks have given us any trouble as far as that goes. And most we've talked to offer the type of construction loan that'll roll into a regular mortgage without having to go through the loan process again, and only one set of closing costs, etc.
I think we're going to talk to First south Farm credit someone suggested and see what they say. If that doesn't work, I think we'll talk to the other bank we've narrowed it down to and see about refinancing them both into one in the end. This house building is driving me crazy and we haven't even started construction yet!! |
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