[lxiting114]

If an home builder wants to buy land from a land developer to build houses to sell, can he pay the land by a divided payment and get an land loan from the commercial bank?

[mich2fla]

When we build our house, the land needed to be paid for before we can start construction.

I'll PM you more information.

[pslOldTimer]

I believe the technical term for what you are asking about is a Blanket Mortgage with Individual Release. It's actually most used by land developers to buy a large parcel of land under the blanket mortgage, plat it into indivudual lots, then pay the mortgage holder for each lot as it's sold and get it released from the mortgage.

In your case, the lots apparently already exist (you mentioned buying them from a land developer) and you simply want to put a collection of them under the same mortgage, then get each one released as you build a house and sell it.

You should probably approach the developer first. There may be a way you can take an option for the lots, pay some sort of carrying fee to maintain the option until the house is built and sold. It's also possible that a lender would agree to a blanket mortgage for this type of arrangement.

I'm not an attorney and this is not legal advice, just common sense. I'd be uncomfortable making such an arrangement. First of all, I doubt a lender would advance money for a construction loan unless you had clear title to the land. And, even if they would, I don't think I'd want to build unless I had clear title. What if the house is built and then doesn't sell? If you don't own the land, your whole investment could disappear and go to the land owner if you drop the option or fail to pay for the mortgage.

I'm not a builder or developer, either, so there may be ways to do this that I don't know about. I'd start by talking to lenders.

[Southside Shrek]

Originally Posted by pslOldTimer

I'm not an attorney and this is not legal advice, just common sense. I'd be uncomfortable making such an arrangement. First of all, I doubt a lender would advance money for a construction loan unless you had clear title to the land. And, even if they would, I don't think I'd want to build unless I had clear title. What if the house is built and then doesn't sell? If you don't own the land, your whole investment could disappear and go to the land owner if you drop the option or fail to pay for the mortgage.

I'm not a builder or developer, either, so there may be ways to do this that I don't know about. I'd start by talking to lenders.

that was very wise advice and pretty much what a prudent lender would say.