How do land loans work?

Land Loans | Raw Land & Lots

Our Land loan program is one of our more popular products.

These land loans are designed as purchase money land loans for those borrowers who aren’t ready to begin construction at this time, and as such are not ready to obtain a construction loan, but will be ready in the near future.

The land or lot must be normal for the area and at least one utility must be available from the street. (Septic tanks, propane tanks, are acceptable if these features are normal for the neighborhood.)

Just like in construction loans & hard money loans, we can fund this land loan both as a Full or Alternate Doc and as a Reduced Doc (Stated income) loan.

Fully Documented Land Loans we offer:

• 80% LTV/CLTV to a maximum loan amount of $500,000 for credit scores of 620, with 6 months PIT reserves and a maximum back-end debt ratio of 42%.
• 90% LTV/CLTV to a maximum loan amount of $300,000, for credit scores of 700, with 24 months PIT reserves and a maximum back-end ratio of 42%.
• 85% LTV/CLTV to a maximum loan amount of $300,000, for credit scores of 700, with 24 months PIT reserves and a maximum back-end debt ratio of 42%.

For Reduced Documentation (stated Income, verified assets) loans we offer:

• 75% LTV/CLTV to a maximum loan amount of $300,000, for credit scores of 680, with 6 months PIT reserves.
• 70% LTV/CLTV to a maximum loan amount of $500,000 for credit scores of 680+/- with 6 months PIT reserves and maximum back-end debt ratio of 42%.
• 85% LTV/CLTV to a maximum loan amount of $300,000. for credit scores of 700+ with 24 months PIT reserves and a maximum back-end debt ratio of 42%

We offer two land loan repayment options:

A 30/2 fixed rate laon. This is amortized over 30 years and all due and payable in two years.

A 30/5 adjustable rate loan. This program is amortized over 30 years and all due and payable in five years. We offer two index plans for the 30/5.

A 12 MAT product with a start rate that is fixed for the first 3 months and then adjusts monthly; and a 6 month LIBOR with a start rate that is fixed for the first 6 months and then adjusts every 6 months thereafter.

We will lend on land parcels up to 50 acres at the following LTVs;

0-20- The above guidelines apply.
20.01 – 30 –75% LTV maximum
30.01 – 40- 70% LTV maximum
40.01 – 50 – 65% LTV maximum

We also offer: Hard Money Loan & Construction Loan

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