New construction LTV in rural area - Oops! ...no comps.

[phxphun]

I've read conflicting posts regarding how banks have changed what they include (or don't) when looking at LTV in light of the current economic conditions.  If that wasn't already enough to make my head hurt, my situation is further complicated because I'm planing on getting a loan for new construction in an undeveloped area.  Can anyone help me understand this? 

1) If I own my land outright, how does the value of the land figure into calculating LTV for the loan?  I know it counts toward down-payment, but how does it figure in LTV?  My land is valued at $200k, my house construction cost will be around $450k and I have $100k to put down.

2) How is the Value appraised for a construction loan where there are no comparables in the immediate area?  Two new homes were built in the area in the last 3 years (one is probably in the $400k range, the other is now for sale for $950k), but there are no sales in the immediate area.  There are sales of raw land only

[ShanetheMortgageMan]

With no land comps it'll be hard for the appraiser to give a value to the "site", other than based on older data which the lender may or may not accept.  It's tough when you are building in areas that do not have data which is needed for the appraisal, the lender might do it but also might cut the value of the land to below what it's actually worth.

If you own the land outright, and at least for 12 months, then it can be figured into the loan calculation somehow.  Depending on if the construction lender requires a cash investment, or if an equity investment is sufficient enough, would determine if the value in the land would be enough to cover everything. 

[phxphun]

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@ShanetheMortgageMan wrote:

It's tough when you are building in areas that do not have data which is needed for the appraisal, the lender might do it but also might cut the value of the land to below what it's actually worth.

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Do they ever use the appraised values of the other new construction in the area (although they've never been re-sold)? 

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@ShanetheMortgageMan wrote:

Depending on if the construction lender requires a cash investment, or if an equity investment is sufficient enough, would determine if the value in the land would be enough to cover everything. 

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I have owned the land outright for 2 years.  By "enough to cover everything" you mean, whether or not they would include the land in the value of the LTV calculation.   Is that correct?

Thanks again!

[ShanetheMortgageMan]

It's concievable that they could use comps of other new construction (from a builder), but that data would need to be available (builder's sales office usually has it, if they are still around), or worst case recorded with the county (assuming you live in a full disclosure state).

By "enough to cover everything" I mean that it could be enough to cover everything so you don't need to come up with any cash outlay to make the deal work. 

[phxphun]

Ah, I see!  This is all mind-boggling...  but you're helping a lot.  Thanks again!