Financing property with Pole Building (loan, fixed rate, credit, rate)

[Colonel Monk]

Howdy!

Been searching google all night for an answer, and so far have not found one! The popularity of these "pole building homes" has made this topic pretty rare, I guess.

Deal is, my brother and I want to buy a building nearby. It's a 30 x 40 pole building on a 1 acre piece of land. It used to be a produce stand years ago. It has septic, bathroom, two sinks, electric, phone, but currently NOT water.

The water used to come from the farm house next door, that was owned by the proprietor of the produce stand. New farm house owners have shut off the water supply.

Not a big deal for us, there's a rain barrel or two outside, easy enough to give it the old bucket flush for now.

We would like the property for the purpose of using it as a workshop and for seasonal storage. Our family compound is nearby. It is possible that we might launch a business from the location, but we would not be living there full-time.

Anyway....

I looked at the property today, and inquired with the realtor about financing..... He mentioned that it was not common for banks to do a "mortgage" per se on land with no home, but wasn't sure what might be possible.

My brother and I can come up with 20% down, MAYBE 30%, but that's about it. The monthly payments are fairly low and totally doable. Well, that's for a 30 year mortgage estimate..... Selling price will be around $40K

If this isn't possible, then what?

When I do search terms for "land loan building" all I get are hits for land loans or NEW building loans, if I combine land with "pole barn" and loan or mortgage all I get are hits for people that want to live in a barn.

So what about buying a building on property with financing?

Thanks much, I am a noob to this sort of thing, I know nothing.

C Monk

[mortgageboss]

You won't find traditional mortgage financing on this one. Fannie Mae, FHA, and other traditional loan programs are for properties with a residence on it.

What you want is land/lot financing. That is in the realm of brick and mortar banks. If they have an active construction lending department, then they probably have some sort of land loan.

Don't expect a 5% down, 30 yr fixed rate at 4.0%. 25% down or more might be required.

If you have a farm credit lender or co-op, that would be a good place to inquire about it as well.

Did you ask if the seller would do a private carry with a decent down payment? That might be the most direct route.

Good luck with your purchase.

[eevee188]

If it's going to take you 30 years to repay a 32k loan, you can't afford it. That's only about the cost of a car payment if you pay it over 60 months.

[Colonel Monk]

Mortgageboss

Thanks for your thoughtful post. I was having a hard time finding info because I hadn't found the right search term. I learned a heck of a lot more in the 10 minutes after your post than I did in an evening of searching for "loan pole barn"

eevee18 yeah, I hear you - don't NEED a 30 year anything to buy it - just don't have all $40K to hand over in one shot, especially before the winter which is the slow season around here..... Financing of any sort is doable, provided we can get it, including a 60 month term.

We'll be talking to our local bank and trying some farm credit outfits as well as trying the owner for land contract.

CM