Construction loan downpayment

[Anonymous]

My husband and I are planning on putting a modular home on 10 acres of land we already own, free and clear. Does anyone know how the downpayment will work? Will we still be responsible for a cash dp? any and all advice appreciated. Thanks. 

[Anonymous]

We are doing the exact same thing except it will be on 4 acres and we're buying the land so we have to do a minimum 10% downpayment and the home must appraise with an 80% LTV. For you, the bank will probably allow you to use the land as collateral and may even use the value of your land as a downpayment. I suggest using a local bank rather than talking to the big guys since the local banks are much more familiar with your market. We ended up using a local bank and dealing with the person there who specializes in new construction (even though it's a modular) so I would try to go that route if you can. Good luck! We still haven't finished the process and it's extremely stressful but we love the modular so we're hoping it will all go smoothly. 

[Anonymous]

That is our plan! We're actually going to talk to a local bank in the morning, but I wanted to get some input from the forums as well. I have learned so much over the last few months. Best wishes to you as you go through your journey. 

[JVille]

The value of your Free & Clear property is your down payment. That value will be established by an appraiser when the entire project is appraised prior to construction.
When did you purchase this property?

[Anonymous]

Hi there- we own a lot free and clear, and are building a house on in in 2020.   Bankers I have spoken to confirm that the value of the land is factored into the whole calculation of the loan, and if you have enough equity in the land, it will serve as down payment.  Good luck!

[Anonymous]

May 2018