Financing in Arizona>Question Details

Eastbay, Home Buyer in Arizona

I want to buy a custom home lot via FHA financing for $90,000. I want to sit on the lot for 5 years prior to building. Is this a possibility?

Asked by Eastbay, Arizona Fri Apr 15, 2011

I am not a fan of putting 20 percent down for a lot loan. Any ideas? my BofA Loan Specialist didn't know what a lot loan was (a little disheartening)

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If you are looking to buy a lot with financing you will become a fan of more than 20% down, if you can find financing expect to put 40% to 50%. Good Luck
0 votes Thank Flag Link Sun Apr 17, 2011
The Title 1 loan is a "home improvement" loan. I do not think your purchase of land for a future improvement will qualify.

Of course you can check with a lender.

There are very few lenders lending on vacant land/lots these days. The last one I knew of was Desert Schools Credit Union. You can check to see if they still do. But be prepared for a big down payment.
0 votes Thank Flag Link Sat Apr 16, 2011
I can get a lot loan via FHA Title I if it is under approximately $24,000 correct? their are other custom home lots in AZ that are below this threshold, so this may be an option here.
0 votes Thank Flag Link Sat Apr 16, 2011
Hi, Eastbay

Without a home or at least a foundation to qualify for a FHA 203K with, you're out of luck when it comes to FHA. A local credit union (especially if you're a client) may be an option.
0 votes Thank Flag Link Fri Apr 15, 2011
As was stated earlier FHA will not insure raw land. But FHA does provide for a constuction to perm loan when you do decide to build. The most common example of this is when someone places a manufactured or modular home on land that they either owned prior to building or purchased as part of the overall package.
0 votes Thank Flag Link Fri Apr 15, 2011
If you can find financing with only 20% down on land, you may want to jump on it!
0 votes Thank Flag Link Fri Apr 15, 2011
Eastbay,

Gregorio is correct. FHA insured mortgage loans are NOT for lots. They are for owner occupied primary resident residential properties.

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PAUL WELDEN, PLLC
Exclusive Buyer's Agent Realtor®
HomeSmart Realty
480.241.0081
0 votes Thank Flag Link Fri Apr 15, 2011
FHA mortgages are for primary residential structures. FHA does not provide lot loans.
Web Reference: http://TripointMortgage.Net
0 votes Thank Flag Link Fri Apr 15, 2011
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