land and new construction loans/ advice

As an investor in new construction, my local real estate broker has a buildable 3 lot subdivision with plenty of potential. My interest is to put three modular homes, 2000 square feet each with a potential sale value of $450-$475K each. (This is in NY)

For all three lots they are asking $400K, which is about $133K per lot + $215K construction, total cost per unit $348K give or take few thousands. There is potential to make $100K per unit , which is not bad.

The big question is how can I finance this deal. I was considering HML, but this might be a 12 month project and high interest and points can take a toll.

Is there a program or loan that can wrap the land and constuction into one, without getting kill with high interest? or can anyone give me some advice on how to finance it?

I was hoping for the seller to hold the mortgage on the land, but she wants all cash.

There are a couple of ways to go about this. Will the seller of the land subordinate her lien on the land during construction at least on the first house? If not you could go for an investment one time close or an interim loan on the first. How is your credit? Will you be able to document income? Answering those questions will really help get you pointed in the right direction.


my credit is on the mid 6 and documented income is over six figures.
If I understood you correctly, there are loans that I can wrap the land and costruction with one close. Is the close before or after construction and what are the requirements?


You can roll land and 100% of construction cost into the loan. Depending on the appraised value of the property you may be able to roll in down payment, closing costs, and construction interest as well. The only out of pocket money is for the appraisal. It is a beautiful thing. With your scores and documented income you should not have a lot of trouble qualifying. Another nice feature of the NOO construction loan is that you can use future rental income to help you qualify for the program. The close is done before construction on the property begins. The property is paid off at closing, and is immediately deeded over to you. It is a win win situation I think. The biggest requirement is that you must use a general contractor. You cannot act as your own builder. Hope this helps.

I work at a manufactured home dealorship and we do land home construction to perm loans with USBank every day. They will give you 3 draws. Just make sure your debt to income ratio including your new loan payments doesn’t exceed 41%