65% Lender, 50% Owner Carry Question...

Ok, this is my first post and somone probably already covered this… but here it goes… Thanks for ANY help in advanced.

I am in the process of purchasing raw land in California to fix up, add a home, etc etc… A friend of mine is a loan officer and he informed me that banks only loan up to 65% sometime 85% on raw land. Now the owner is willing to carry whatever is left over after getting a loan. My question is: Is it a good idea/legal to have the owner carry 50% and get a loan for 65% or more therefore having a surplus of funds to be able to do improvements to the land?

I am still trying to get a grasp on this whole financing and how the process works. Ive been reading these forums for sometime now and I appreciate any of your wise advice.



As long as the lender will allow the combined loan-to-value it’s not a problem.

Oh, I see. Do lenders usually allow this though? I read in a diff post that lenders dont like to give more money than is needed.


At 65% LTV and 95% CLTV there are a number that will not mind as long as it looks like you can service the debt.

Why not go for financing on the whole project at once… land acquisition, development and construction. You are likely to receive more funding when structured that way…

What type of loan would that be? I was told that for raw land all you can get is at best 85% LTV… I have no equity anywhere as this is my first buy.

Give me the 411 Zach. 8)


It would be a loan based off the total cost of you’re project as opposed to a loan based off just a raw piece of land. I don’t have enough detail though. Im not sure if this is for investment purposes and how you’re financials are…

Ah i see, so its presented to the lender as a project. So it would be like a loan for the construction of the house, land included.