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)

Thanks All

Help the community by answering this question:


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

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

Exclusive Buyer's Agent Realtor®
HomeSmart Realty
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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