How does financing of raw land work?
There are many ways to finance raw land, depending upon what you want to do with it. The USDA has several rural home loan programs and the Farm Credit Agency will also finance parcels of land (typically larger than 10 acres) on which homeowners intend to construct a home. For farmers Farm Credit Agency will also finance farms. Restrictions apply regarding income and the use to which the parcel will be put. Other than these two institutional lenders it is very difficult to obtain financing on raw land, particularly if it is outside the local lending area of the lender or does not have full utilities to it. As a general rule banks do not like loaning on raw land at all; if they lend at all it is for a very low percentage of the purchase price, not ordinarily over 50%. For this reason sellers of land generally need to offer owner financing because it is a rare buyer that has both 50% of the purchase price and is willing to pay that much down on a purchase. We offer nearly 100% financing o
