We provide TWO types of lot / land financing in California:

  1. Consumer — Bank financing for the purchase of one land / lot parcel for construction of a primary or second home; we do not offer land / lot refinance loans at this time, nor do we offer “cash-out” (equity loans) on raw land. We do offer construction financing once the “pre-development” of the project is underway if you already own a lot / land parcel.
  2. Developer — land acquisition / development financing for experienced developers and spec home builders / commercial development contractors. This is private banking / private money lending intended to assist residential and commercial developers in establishing land tracts and subdivision maps, followed by construction financing.

“John has done two very difficult loans for me now — one on my apartment building and another on this recent investment property. The sellers we had to deal with for the purchases were very difficult and did nothing to make the process easy. John was always there, doing things in the background to make sure the transactions were closed. I would recommend him to anyone who needs a real advocate for obtaining a loan.”

~ Teena C., Hawthorne, California

Consumer – Residential Lot / Land PURCHASE Loans

Land purchase financing for the purchase of ONE California residential lot / land parcel, per applicant, for future construction of an owner-occupied, primary or second home SFR residence. See our land loan restrictions.

  • A one-tenth-acre to 5.00-acre parcel is the primary acceptable parcel size with the lowest down payment requirement, depending on the availability of certain utilities at the site as well as qualified credit score of the applicant(s);
  • A 5.01 – 10-acre lot qualifies for this program without the need of a special exception by the lender.
  • A 10.01 – 20-acre parcel requires a special exception by the bank, and there MUST be comparable, closed sales of parcels of 10.01-20 acres within the subject market area in the preceding 12 months from which an appraiser can obtain comparable sales data;
  • 20.01-acre or larger parcels — NO FINANCING OF PARCEL LARGER THAN 20 ACRES. If you are a licensed, residential developer seeking to purchase multiple lots for spec home construction, please call for information on our available programs for developers.Residential Lot / Land Purchase Terms3/1 ARM loan term. Interest rate and payment are fixed for 3 years, adjustable once annually after the 36th month. Monthly payment of principal and interest based on a 30-year repayment schedule. (Index is 1-year Treasury plus 3.25% margin after first 3 years. The “Floor” rate is the initial note rate – payments will never be lower than the initial note rate after the 36th month). CALL FOR CURRENT RATE.Sale Price and Max Loan Amounts, Down Payment When the subject land / lot has PUBLIC (municipal) wateand/or sewer at or near the property line:
  • 20% down payment lot / land loan is required for:
    One lot / land parcel (one Assessor Parcel Number, or “APN”) – this program will NOT finance multiple parcels regardless of what the future intent may be, down payment, etc.
    Maximum 5.00-acre parcel size
    Residential zoning, or AG zoning with allowance for residential construction (non-commercial AG zoning only – i.e., not a farm)
    Minimum sale price from $125,000 to $375,000 (loan amount of $100,000 to $300,000);
    720+ mid-credit score for all applicants, and qualified credit history within the 7 years preceding
    6 months of payment-equivalency reserves in qualified assets (retirement, investment, cash, etc – call for specifics)
  • 25% down payment lot / land loan is required for:
    One lot / land parcel (APN #)
    Maximum 5.00-acre parcel size
    Residential zoning, or AG zoning with allowance for residential construction (non-commercial AG zoning only – i.e., not a farm)
    Lot / land sale price of ~ $533,000 (loan amount not to exceed $400,000)
    720+ mid-credit score for all applicants, and qualified credit history within the 7 years preceding
    6 months of payment-equivalency reserves in qualified assets (retirement, investment, cash, etc – call for specifics)
  • 30% down payment lot / land loan is required for:
    One lot / land parcel (APN #)
    Maximum 5.00-acre parcel size
    Residential zoning, or AG zoning with allowance for residential construction (non-commercial AG zoning only – i.e., not a farm)
    Lot / land sale price of ~ $714,000 (loan amount not to exceed $500,000)
    680+ mid-credit score for all applicants, and qualified credit history within the 7 years preceding
    6 months of payment-equivalency reserves in qualified assets (retirement, investment, cash, etc – call for specifics)
  • 30% down payment is ALSO required when the subject land / lot is:
     Less than 5 acres AND:
     the lot / land parcel has or will require both well water and private septic system, OR;
     Qualifying credit score (lowest middle credit score for all applicants) is between 680 and 719
  • 35% down payment lot loan is required for:
    One parcel (APN #)
    Maximum 5.00-acre parcel size
    Residential zoning, or AG zoning with allowance for residential construction (non-commercial AG zoning only – i.e., not a farm)
    Lot / land sale price of ~ $1,154,000 (loan amount not to exceed $750,000)
    720+ mid-credit score for all applicants, and qualified credit history within the 7 years preceding
    6 months of payment-equivalency reserves in qualified assets (retirement, investment, cash, etc – call for specifics)
  • 35% down payment is ALSO required when the subject land / lot is:
     Larger than 5 acres AND:
     the lot / land parcel has one or both public (municipal) water and sewer line at/near the property line
  • 50% down payment is required when the subject land / lot is:
     Larger than 5 acres AND:
     the lot / land parcel has or will require both well water and private septic system

Restrictions – Consumer Lot / Land Loan Purchase Financing

  • We do not cooperate with loan brokers or accept referrals from loan brokers — sorry.
  • No vertical improvements allowed. This financing is limited to unimproved parcels — only a remnant foundation may be present on the subject lot. Any improvement on a foundation of any type will be required to be removed prior to the appraisal, regardless of type / condition / intent / usage.
  • Purchase loans only — we cannot accommodate refinance loans of land / lots at this time
  • No cash-out — we do not provide cash-out loans on consumer land / lot loans (which is a form of refinancing, and we do not refinance parcels intended for consumer purpose)
  • Minimum lot loan amount is $100,000 (minimum sale price of $125,000 on 20% down payment-eligible parcels)
  • Minimum 680 middle credit score from amongst all applicants
  • 1st-lien position loans only — this is not a 2nd loan product, and no seller or secondary financing is allowed behind the 1st loan
  • Residential zoning or allowance of construction of a 1-unit home on non-income-producing agricultural (AG) property only. This is not for commercial or industrial land financing.
  • California land / lot parcels only
  • No “co-signers” or third-party guarantors
  • Full income and asset documentation required
  • Other conditions and restrictions apply — call or email for details.

 

For residential lot loans in California,
call me direct at 1-800-644-8829.