Down Payment / Financing Raw Land Purchase

[Doc Holliday]

I could do some googling on Ag Credit etc and probably get some general answers, but thought some here might know the answers, especially if there are any caveats for CO, WY, MT, ID, etc.

- What is the typical loan to value required for land purchases these days?

- Typical terms and interest rates?

I know some here said they bought land out west, wondering if you could share the above if you financed. My immediate goal is to know what range I should be looking at....ie: if I have 50K cash and typical down payment requirement is 25%, then I can look at properties in the 200K range, etc.

 

[BadDogPSD]

Most raw land lenders want 50% down and 10 year terms for the balance. There are exceptions if course, and you can find owner financing for less down, but typically at a higher apr.

 

[StorMay05]

Bought raw land last year in NWFL and used Farm Credit. 15 year loan at 4% with 20% down.

 

[Breddoch]

I checked some months back with one of the ag credit lenders in the SE. They wanted 20% down, 4% for as long as 20 years.

 

[Haggin]

Farm Credit or Rural 1st (part of farm credit). Call a local rep for either and go over details.

 

[Firestone]

The bank we went through wanted 30 percent down. Raw land 25 acres

 

[Aluminum Rain]

Started with a bank in 2002. 20% down, 30 yr term. Later refinanced it with Farm Credit. Was down to 2.9% on a 7yr ARM. Paid it off in 2018.

 

[Silveroddo]

Just checked this week
Bank 1 20% down, 4%, 3year fixed, 10 year ARM
Bank 2 10% down, 4.5% 5 year fixed, 10 year ARM
Plus closing
For the guys using farm credit, are you running actual Ag operations, or can anyone go that route with bare land?

 

[TX_Diver]

Looked awhile ago and the local bank was at 5% for a 10 year loan. For bare land they treated it like a loan for a commodity rather than real estate.

Think that was with around 20% down. Didn't explore the farm credit or other options at the time.

 

[rtaylor]

We found a piece of land and are building a house on it. Raw land financing was pretty tough on terms. By doing a construction loan we could wrap up the house and land on one 30 year note with Rural 1st. Might be worth putting a super small house on it to make it a construction loan vs a raw land loan.

 

[StorMay05]

Just checked this week
Bank 1 20% down, 4%, 3year fixed, 10 year ARM
Bank 2 10% down, 4.5% 5 year fixed, 10 year ARM
Plus closing
For the guys using farm credit, are you running actual Ag operations, or can anyone go that route with bare land?

As far as agri-business no. I do have horses but that’s it other than pine trees

 

[Aluminum Rain]

No ag for me either. Farm Credit has been so good to me I have my house refinanced through them too. Their interest rate may be a couple tenths of a percent higher than the cheapest bank but my annual patronage payment from them, for being a member, covers at least one monthly house payment each year. The membership fee was $25 once.

 

[Aluminum Rain]

They dont sell any of their loans, at least here in NE Wisconsin, to Freddie or Fannie so they have more flexibility on certain issues and you will always deal with them. Not whoever buys the loan from your lender.

 

[JBrew]

Just checked this week
Bank 1 20% down, 4%, 3year fixed, 10 year ARM
Bank 2 10% down, 4.5% 5 year fixed, 10 year ARM
Plus closing
For the guys using farm credit, are you running actual Ag operations, or can anyone go that route with bare land?

They have programs that do not require an operation or ag related activities.

 

[74Bronco]

Farm Credit Loan Officer here, we require 35% down and up to 20 years financing. Some areas are allowed to do "Rural Property Financing" we are not without some ag business. Currently. If you are to be a landlord and rent out 160 acres plus to a farmer or rancher, that qualifies you typically. If it is strictly recreational that is different. Good luck!