In my experience 15% is most lenders absolute minimum down payment on raw land, so 25% to 50% down is going to be fine for a lender. I've got a great contact at Capital Farm Credit (also a TexAgs sponsor, who I happened to have season tickets next to for years) that I've worked with on several farm and ranch sales that I can put you in touch with if you'd like. And finally, I also own Red Pear Ranches, and do our 2% rebate for farm and ranch purchases as well.

Tormentos said:

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I am looking at making a purchase of 30-40 acres of undeveloped land in the next next 3-6 months. Areas I am looking at are running around $25-30K/acre. %A0

This will be my first time purchasing undeveloped land and I am interested to understand the various financing options and down payment requirements for a land purchase. My plan is to put roughly 25-50% cash down and finance the rest. I have my primary residence paid off and wondering if it would be better to do a cash out refinance to fund this purchase - would that get me better rates than just standard loan for undeveloped land?

What type of lender do I need to be speaking with for a land mortgage - something like Texas Farm Credit?

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I'd be happy to take a look at cash out refi rates if you need to see how that angle would be. We don't do raw land loans, but I can certainly help look at going rates for the refi. Happy to help in any way I can.

Brian
Bbailey@gomycity.com

https://mycity.mortgage/brian-bailey/

just went through this process for land in OK.

here are the loan options i received:

bank #1 (in OK)
5 year balloon, any amortization period (up to 30 year), 15% down minimum
3/3 arm, 4.5% first 3 years, any amortization period (up to 30 year), 15% down minimum

bank #2 (in TX)
5/1 arm, 4.125% any amortization period (up to 30 year), 15% down minimum

bank #3 (in OK, AR) - will not lend on land in TX
7 year fixed, 7.65%, 35% down minimum,
7 year fixed, >8%, 0% down
5/1 arm, 5.14%, 35% down minimum
5/1 arm, 5.69%, 0% down

I did not want to mess with a cash out refi or HELOC (4.675% for full financing) although I had plenty of room to do both and use cash for 100% of the land cost. I intend to have this land paid off in less than 5 years so option #2 was the best for me and didn't put any other liens on my primary residence.

good luck in your search, but there are plenty of banks out there that will finance raw land.

Waiting on your call.

CapitalFarmCredit said:

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Waiting on your call.

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I called

You talked to Kenny?

Yes

Was just about to post asking about land loans. I am looking at some ag exempt land in the same area as OP. I would like to buy it and sit on it with plans to build down the road. What are some common rates and loan terms? I have no problem with 20% down. Are there 20 yr amortizations? Your #2 choice is not horrible, but a fixed rate would be better.

Just curious who was the texas bank?

The Liberty National Bank in Paris, TX
https://www.lnbparis.com/