MLS 566370What people don't know about land financing.
Buying land is a bit different and therefor a bit more challenging than the traditional real estate transaction. Specifically when it comes to securing money to finance the transaction. Pryor to the collapse of the real estate market landers would consider loaning on land. Now it is virtually impossible. Well there is good news. There are several ways to accomplish this. Of course cash is always a good tool and often get the buyer a better pricing in the purchase. Absent of that there are several sources. 1. Commercial lenders will work with buyers, given there is a relationship. Typically they charge a premium for their services anywhere from 2-5 percentage points above traditional lending with a short duration on the time to pay out. Amount of money down usually runs 25% to 50% with an appraisal.
2. Carolina Farm Credit is still in the game. This is a private , for sake of a better term, coop. They will lend up to 20 years and can lend up to 85% loan to appraised value. There is also a requirement to join the Farm Credit for a nominal fee.
3. Seller financing is also a viable option They literally become the lender and should require the same creditworthiness and a traditional lend since they are carrying the debt for the buyer. Terms must be negotiate upfront. So there is hope we just need to keep the market aware of these tools to assist buyers and seller in acquiring land in Western NC.
In all cases contact you lender or Carolina Farm credit for details. This is only intended as a source to the source or an information piece.
