Hey guys -

Found a great little piece of land out here... Its 10 miles closer to Boise, fronts both sides of the highway AND one side of More's creek (with some water rights and all the mineral rights), nice, flat, usable 8 acres.

I can get all the little debts gone within a week or so, and the bank said that should go a long way. However, they don't want to lend on THIS piece of land!!

See, we want to build our own house. Rich even has referrences from his building days (less than 5 years ago). We want to put in alternative electric, preferably hydro/solar, as wind doesn't SEEM to be much of an option.

They tell us we need a construction loan, which will cover the purchase price of the land. To do this, they say we need to bring in power from the grid, sink a well, re-liven the septic (gee, never woulda thought of that one on my own.... RRR) get flood insurance (because just last year it was listed as flood-plain), AND build a CONVENTIONAL house!!!

We want to do a timber-frame bale house, with composting toilets, etc etc. They won't loan for that. It has to be 'stick-built'. AND they want us to hire out all the work - not just the plumbing and electric, which we could do ourselves as well, but aren't licensed for.

The realtor told us to get a contractor to sign and supervise, and we are trying. But, the plans have to go through the bank after they go through the county. County doesn't have formal building codes of its own, but they like having a say on the 'look' of what's going in. Still, they are very amenable here to 'alternative' structures.

Even if the County agrees - there's no guarantee the bank will abide by that decision - and they seem really conservative. Not two miles away, there is a tudor-style with gray stucco and painted on wood detail... I haven't been inside to see what its REALLY made of, but it looks similar to what we had in mind.

I've talked to six different banks, and even had the hubby call, thinking that a male might get a better response. The only other option I've been offered from the bank is to buy a 1990 or newer double- or triple-wide, and have that company do all the work.

In pricing some through the paper, it would be MORE expensive to buy even a double-wide and set it up with well, bring in electric, etc than to build on our own. AND, it'll be really hard to sell after we've built our house, as they go for a LOT less when they have to be moved. It also has to be put on a 'real' foundation, taking up good pasture and requiring permits to get rid of the broken foundation after its gone. Course... it could be used as a really expensive small barn.........

I am trying to locate and talk to the owner to see if he will take back the note and end this stupidity...

ANY AND ALL IDEAS/PRAYERS/SUGGESTIONS ARE GREATLY APPRECIATED!!!!!

Thanks for letting me vent, too!!

-- Sue Diederich (willow666@rocketmail.com), July 13, 2001

Answers

Sue,

Build it then get the paper shufflers to sign off.

Will the owner do owner financing? Hmmm will seller sign for secondary loan and then assign it to you? Got any relatives or friends heeled enough to put 22% of loan value in escrow and let you use it for additional collateral to 'push' through the loan?

If I were there I could be of more help.

Good Luck.

-- Kenneth in N.C. (wizardsplace13@hotmail.com), July 13, 2001.

Sue, do you think you can just get the land...then build AFTERWARDS? I think you may have told the banks too much. They only need to know what it is they are lending on. The land is the important thing, the buildings can come as you go along. If the local government is cool with alternative architecture, the permits shouldn't be a problem to obtain.

Best of luck and you got the prayers coming. Just remember, sometimes God saves you from yourself. If it's meant to be it will happen;)

-- Doreen (bisquit@here.com), July 13, 2001.

Around here, banks will not loan money to buy land that has nothing on it. Unfortunate, but true. We had to take out a mortgage on our other place to buy this one, then pay it off as soon as we finished building. When you have banks involved, they want to be sure they can sell the place should you default on the loan. I agree that getting the owner of the land to carry the note would be the easiest if they are willing. Many around here will do that because often that is the only way they can sell land. If you can't get this piece of land, perhaps you can find another where the owner is willing to carry the note and let you make payments on it. Then perhaps you can get a construction loan. Only problem with that is that gets the banks involved again with all their restrictions which can be more than the government! The ideal thing to do would be buy the land from the owner with them holding the note and then building slowly as the cash is available without taking out a loan. Will take longer obviously but when you are done, you don't owe a bank. Then use the money you were putting in to the building and pay off the land. This is basically what we did with our first place years ago. We bought 10 acres with a mobile home on it. The bank was willing to finance part of that. We built the house (took over 2 years), sold the mobile home then paid off the land. Then when we bought this 90 acres 8 years ago we had to take out a mortgage on the first place which we paid off as soon as we sold it.

-- Barb (bjconthefarm@yahoo.com), July 14, 2001.

Sue ,when we considered this years ago,we were in the same boat as you.Another place came up with a house and we took it instead,but the dream never dies,so we re-thought and this is what we would do now.We would buy a large house trailer,used or cheap,live in it while we built debt free,cordwood was our choice.If you keep the trailer in good shape you almost always get a good price for it.Just a thought and ,I realize not everyone can do that,but we would have our land paid for ,and only a small debt for the trailer.To be honest I have a 150 yr old dream home now,that we bought with,no running water ,no heat,and we renovated.But i would leave in a heartbeat for a decent barn!!!!!

-- teri (mrs_smurf2000@yahoo.ca), July 14, 2001.

Keep looking for a bank willing to take this kind of risk. Think about it from their perspective. If you default on the loan, what do they have? Raw land is too hard for a bank to liquidate. Alternative housing has too narrow of a market audience. They want something that will sell quick at a profit if you default on the mortgage. There are lenders out there (I think) that understand the value of what you want to do and will lend you the money to do it. You may not get the lowest interest rate however.

-- Skip Walton (sundaycreek@gnrac.net), July 15, 2001.

Sue, have you tried Farm Credit? They finance any type of farm type property, their rates are a bit higher than banks, but they consider property without a livable house to be higher risk, thus justifying the higher rate. They are very flexible too, but demand 20% down payment to cover increased risks involved.

Farm Credit is the only financier that would touch anything, even with a house, over 20 acres here in Ohio, banks were just not interested in 104 acres, didn't even know how to appraise it! No problem for Farm Credit!

-- Annie Miller in SE OH (annie@1st.net), July 15, 2001.

Hi Sue, I would also suggest you try Farm Credit. I was a loan processor for Farm Credit when we lived in NC. Great company! Actually, they are the oldest co-op in the US. The loan officers there have the ability to approve a loan themselves (up to a certain amount - 10 yrs ago it was $100,000 but am sure it is much more than that by now) without having to go to committee, etc. for the approval. They're only business is farm oriented land/farms, etc. (although they will do residential). They also finance for new construction. With Farm Credit you get to work with a "real" person who understands much better than a bank who has to get approval from a dozen other people and does not understand country folks and thier wants and needs. Gee, I should do commericals for Farm Credit...LOL! Best of luck!

-- Karen (db0421@yahoo.com), July 20, 2001.