Financing Land

Financing land is totally different from borrowing on a single family home.

Usually your normal bank can not or will not loan money on land unless you intend to obtain an A & C   ( Acquisition and Construction Loan ) or A& D ( Acquisition and Development loan).

Most banks consider land a risky or speculative investment and thus have much more stringent guidelines.

Homeowners with significant equity in their home are usually better off obtaining a line of credit (LOC) to use for the initial 25% down payment or to outright pay cash for land.

After obtaining title then the process becomes much easier .

Banks will normally only loan 75% of the purchase price even if the land is worth significantly more for an acquisition .

In some cases, if a buyer has a significant income and cash for a down payment, some local banks have been known to actually set up a line of credit in excess of the purchase price at the time of acquisition.

Most sophisticated land investors fall in the latter category.

At Atkinson Properties, we work with all levels of investors but the financing is the key to everything. Therefore, we always suggest that all investors meet with lenders prior to researching any land for investment.

Not every bank is good for land loans but we can recommend many in the Triangle area who are.