Funding for Property on Indian Lease Land (Palm Springs, Palm Desert: mortgage, loans)

[Marsha F]

Hello:

Does anyone know of a lender(s) that fund loans on homes/condos that are built on Indian Lease Land.

Thanks very much.

Marsha F

[GoodbyeCalifornia]

Marsha:

Since you're talking Indian land lease property, though you don't say it, I am guessing that you bought something in Palm Springs or very close by. My first response is, I'm really sorry that you did it. I always urge people to avoid land lease properties like the plague.

As to your question; are you just asking in general or are you having difficulty finding a lender for your purchase? I ask because there usually is no problem obtaining such funding on lease land property. The only time I have heard of such an instance is when the lease has run below the 30 year mark. Is that the case with the land your property sits on?

In any event, if you do not know the terms of the lease governing where you are buying, find out as quickly as possible. Land leases can be a nightmare when it comes time to re-negotiate them. Negotiations tend to drag out years, rather then months or weeks. If the party responsible for collecting your land lease fee has not been keeping up with the cost of living increases in the fee, you may get a notice one day that you owe an extra few hundred dollars because of it.

If you are having a problem finding funding, and you are buying in Palm Springs itself or the area, my only suggestion as to a possible source would be Canyon National Bank. The bank is owned by the Indians, so I cannot imagine that they wouldn't loan money for a property sitting on land owned by one of their tribe members.

Should you have any questions regarding land leases or HOA's, please feel free to post them and I will do my best to answer them.

[Marsha F]

Hi there:

No, I am not purchasing the property. I was asked by a real estate friend and since i had never approached the funding aspect of that type of property, and he asked me (I am a loan officer) to find a lender for one of his clients.

I have also read some of your posts on Indian Lease Land and I am taking to heart the issues of the transactions. Thank you for helping to educate me.

So, to confirm...you think that a loan would be possible with most lenders? I will call a few to confirm myself. And, if i get stuck, I'll call the bank you mentioned.

You are an angel.

Best regards,

Marsha

[Exec Libra]

Marsha,

People finance homes on Indian-leased land all the time in Palm Springs. Local branches of national banks work just fine. I used Wells Fargo Mortgage in Palm Desert; the loan officer there is Nancy Stellings and she was very helpful. Your realtor will have his or her own recommendations. The same is true for escrow companies; the Indians must approve transfers of real property that occur on their land, and a good escrow company understands how these transactions work.

While I've owned property on both fee simple and leased land, and obviously not having a land lease is preferable, if you like the real estate I wouldn't let the existence of a lease push you away. On the other hand you may ask your realtor whether there is a similar property nearby that isn't lease-encumbered. Due to the checkerboard pattern of Indian ownership, chances are there will be a fee simple block close at hand.

[GoodbyeCalifornia]

Marsha:

To the best of my knowledge, other than with the specific situation that I mentioned, I do not believe that there should be a problem in obtaining funding through a regular lender.

Also, many thanks for your comments. I'm glad you found my posts informative.