This week I was contacted by a Lender I had done quite a bit of business with several years ago who told me about a new Lot Loan Program she now has available. Of course that got my attention as currently there is only 1 Lender in Tucson providing what I consider a viable Lot Loan. And that loan has a 20 year amortization which pushes the monthly payment much higher than many of my clients would like. So I was anxiously awaiting the details of this new program.

When I got the details I have to say I was pleasantly surprised, although we’re not back to where we were as recently as 18 months ago when land loans were still abundant and thus very competitive. On the plus side, the loan can be used for new purchases or refinances, has a choice of 15 or 30 year amortizations and can apply to finished lots or unimproved lots where utilities are close by. By the way, this is the first program I’ve heard about in a long time that is available for unimproved land. The best part is the rate as of today is 5.5%. I mention that with a little caution as I don’t  yet have all the fine points of this program, but will shortly. The loan has a maximum 70% Loan to Value, requires a minimum credit score of 680 and has a 3 year balloon. I’d like to see LTV’s a bit higher and balloon’s a bit longer. For someone planning to build their own home 3 years is more than sufficient but for an investor, it is the bare minimum.

So this loan is not perfect but may be the best we now have in Tucson. More importantly,  I hope that it is an indication that Lenders are re-thinking their participation in Land and Lot Loans and that we may be at the very early stages of a return to a more normal mortgage climate.

This entry was posted on Monday, March 8th, 2010 at 8:37 am and is filed under News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.