Rural New House Build - Good Lending Agencies?

[Pettrix]

Rural lot out on 15 acres. Own the property out right (no mortgage) with a current guest house (under 1,000 sqft) that I built a few years ago. Has a 30gpm well and oversized septic that is certified for 2 houses.

Planning on building the main house next to the guest house but wanted some references for a good loan company/bank that would loan on the main house project on rural property and are OK with a owner/builder as I will be the GC for the future home. As mentioned, well, septic and underground power already on site with the current guest house. So the infrastructure is there (spent $30k on that).

Appreciate any input...

 

[dstig1]

It is not easy to find banks that will do this. The first words out of their mouths will be "construction loan" and that sounds like what you want until you realize the details. They last typically 6 months and can often be extended a few months due to delays, but if you are hoping for a multi-year loan, this is not it. They expect to be making periodic "draws" on the loan as benchmarks are met (foundation complete, framing complete, etc) to pay off subs, GC etc. They will often require an onsite inspection to approve the draws. There is nothing wrong with this if you are having a crew build it as it will move along fast enough for this to work. If you are retired doing it on your own or even worse, nights and weekends, then your timeframe won't meet the bank's.

Credit unions are often more flexible but I found that there was nobody that would finance in a manner that would really help me as I was building myself. The best route I had was 1. lots of savings to start. 2. Mortgaged my previous home that we owned free and clear 3. then sold the old house, moved in and got a loan on the partially finished new house as a cash-out refi. That last part was a struggle as it was so unconventional to banks that only the local credit union would bite.

 

[3Ts]

When I tried the same thing, the first question I was asked is "How many homes have you built?" I have built 1 prior and that wasn't enough to satisfy them. dstig1's response reflects my experience too.

 

[pjigar]

You are asking a wrong question! Don't get loan for house but rather get a loan for/on land. Talk to a local "land bank". Search for it. Example in our area: Heritage land bank.

 

[Pettrix]

Since I own the land and the guest house on it, it appears the better route is to probably just get a "cash out refinance".

The total property is worth around $425k-$450K

 

[civilian]

We used Greenstone Farm Credit to finish off the house build. Used money from the first house to buy the property free and clear, then starting building. When money ran out Greenstone loaned us money based on the 80 acres we owned. No visits, nothing. Just used township tax record to verify amount invested in the place. They are based in Lansing Michigan. Not sure how far of an area they serve.

Since you have a house on the property, can you get a home equity loan to build the house? Jon