Land Financing

[jbell1981]

Just found out the 40 north of mine is for sale. Does anyone have any recommendations on places that specialize in recreational/vacant land financing. I haven't tried yet, but I've always heard that most banks shy away from vacant land unless there is a development plan involved. 

[Wanderer]

In my experience banks want collateral that can be liquidated quicker than the actual land itself, but sometimes the local bank in the area might be more forgiving than your own local bank.  Not much but some, in the interest of investing in their own area.

 

The other reason for more collateral is to make you have skin in the game making it harder to walk away from the debt if you change your mind on your want.

 

Either way, raw land can be tough on credit alone.  I’d start calling your bank, the local bank up north and a credit union to start 

[fishingstar]

when I bought my land I had to use my house as  collateral. It didn't mater to me witch one I was making payments on. Interest rate on a home will probably be lower anyway.  

[delcecchi]

I see ads from local banks and credit unions that they finance land and recreational property.   

For example, the Northstar Credit Union in Cook... 

https://northstarcreditunion.org/home-loans/

 

Minnesota is a recourse state, so you can't just walk away from a mortgage anyway, so it probably doesn't matter too much whether you put up the land or a house as collateral, except possibly in the rate, depending on how you do it.    

Edited November 25, 2020 by delcecchi

[Paradice]

Your state's farm credit agency.  They cannot be beat because they operate under coop rules with federal protections.