Unlike Home Only financing, Land/Home loans are normally the same as loans on stick-built, conventional homes in terms of interest rates and down payment requirements. This type of loan includes the cost of the home, land, and improvements to the land. You can finance a garage along with your foundation, septic system, land clearing, or more. You can pick which type of Land/Home loan you need: conventional, FHA, or VA. You can also choose your lender. As these loans are typically more complex than similar loans on an already existing home, we suggest you choose your lender carefully. Ask them how many of these loans they have made from start to finish. We suggest you consider paying a little extra to make your Land/Home loan a “construction” loan. This way, your site contractor can receive draws like a builder, rather than waiting until the very end to receive funding. Some Land/Home loans don’t have this “construction/draw” feature, so check with your lender. You should see a slight reduction in your site contractor’s bid by using a “construction/draw” type loan that typically offsets any extra loan fees.
