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Can I build a new home on my property and qualify for RD

I own a few acres in an RD approved area. Could I build on that and do the permanent loan in RD? by candace.meeks705 from , California. Sep 6th 2017 Reply

William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,727 contributions

Yes.. and No.. The benefit of an RD loan is zero down.. but you already own the land.. and under conforming loan's the land value is your down payment.. so long as the land represents 20% or more of the overall value of the improved property, then you can use conventional financing and no mortgage insurance (MI) is required.. If the land value is less than 20% of the overall value, but greater than 5%, then you could still use conventional, but there will be MI. The bigger problem is finding a lender who will do a RD construction to perm. loan. Although these are available under USDA, keep in mind that they do not lend money.. they only insure loans against default.. so finding a lender willing to do one is near impossible.. You're better off applying locally for a construction loan, and then once you are near completion, apply for a permanent conventional loan.. I'm a preferred Lender with California and Arizona being my primary markets. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 NMLS# 226347 / RPM Mortgage NMLS 1541014 / AZMB0121893

Sep 6th 2017
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