Legalese: Own land for how long before building? (Howe: credit, construction loan)

[Pontificator]

Hi Friends, Neighbors, and Purveyors of Great Texas Info! Can anyone tell me if there are legal requirements on how long one must own a parcel of land before obtaining a construction loan? I have been told I must first own the land for two years......is this the truth, or BS?

Thank you, thank you!

[RSTX]

BS. If you own it you can build on it.

Unless there are some strange rules in the purchase contract I cannot imagine why you would have to wait two years to build on land that you own.

[TexasNick]

However, once you lay a foundation for the home, you have to complete the home in a certain amount of time. You can't just leave the foundation on it forever. Check your deed restrictions.

[momof2dfw]

Some developments actually have rules the opposite. Once you buy the lot you have a certain time period that you MUST build on it. I've never heard of any development, city or whatever that puts a restriction on how long one must wait before building. As TexasNick said, you also have a certain time frame that once you get approval you must start and be finished within a certain time period.

[Pontificator]

Thanks guys, we have been told the opposite by an unscrupulous bunch of cronies! I was aware of the usual requirements for developments, in which you must build within a time frame. But had been told by the aforementioned group of cronies that you must own a piece of land free and clear for two years before a lender will approve construction financing (for a less development development, if that makes any sense).

[momof2dfw]

Originally Posted by Pontificator

Thanks guys, we have been told the opposite by an unscrupulous bunch of cronies! I was aware of the usual requirements for developments, in which you must build within a time frame. But had been told by the aforementioned group of cronies that you must own a piece of land free and clear for two years before a lender will approve construction financing (for a less development development, if that makes any sense).

No, that makes no sense at all. If these "cronies" are friends........I'd find a new group. I'd also buy somewhere else away from these "cronies".

You can go buy a piece of dirt out in BFE a 100 miles from nowhere and if you have the credit and it appraises the bank will give you the money to build in the first few weeks. Never heard ANYTHING about owning land "free and clear for two years" before being allowed to build.

[Pontificator]

Nope, the cronies are not friends -- and I learned that this forum disallows a particular descriptive word which I prefered to use over cronies!!

This was actually a retrospective question -- we built our home a few years back and were told all manner of BS. We had various small-town financial forces trying to get us to back out of the deal, pretty much because we have a stunningly beautiful lot that multiple other parties wanted. Long, boring story, but we actually ended up with a good deal. And we are plotting our empty nest new construction in a different locale.......

[TexasTheKid]

Perhaps they meant you would have a difficult time getting a loan for the construction if you already had a loan on the property. Credit's pretty tight these days.

[Pontificator]

Originally Posted by TexasTheKid

Perhaps they meant you would have a difficult time getting a loan for the construction if you already had a loan on the property. Credit's pretty tight these days.

Not the case -- property was purchased with cash! And credit is not an issue. Just cronyism at its finest.

[EasilyAmused]

hmmm...what's in it for them if you hold off building??
Makes you wonder. Is your property good for poaching?