Can you include the vacant land next door on the same sales contract with a USDA loan?
If the seller wants to include the vacant land next door as part of the sale, can you finance that adjoining lot with a USDA loan?
While this may seem like a very unique and specific scenario, it is a common question that occurs when working in rural areas.
In today’s video, I will explain the details on how a USDA loan can help you finance an adjoining as part of the transaction, but, before we get started, don’t forget to download our USDA Blueprint for Success with the link below.
This educational guide is designed to help walk you through the USDA process step-by-step and is designed as a resource for both homebuyers and Realtors alike.
Can you include an adjoining vacant land with a USDA Home Loan purchase?
Well, the short answer is YES, but let’s further review the details to keep you in the know!
As a starting point, current USDA guidelines have improved flexibility for buyer and sellers that want to include vacant land and parcels that are connected to the subject property as part of the transaction.
Further, while this is not a comprehensive list, here are critical points to remember when a buyer wants to purchase a home and include an adjoining lot with a USDA home loan:
- Lots Must be adjoining (connected);
- If the lots have not yet been combined, remember to separately list each parcel ID on the same sales contract;
- The appraiser will include all parcels in the value;
- The total site size must:
- be typical for the area, and
- be predominantly residential in use, character, and appearance, and
- the site must NOT include land or buildings principally used for income-producing purposes;
- All lots will need to be included with the final survey
In summary, while USDA loans can be flexible when trying to include an adjoining land with the transaction, other loan programs or lenders may require the parcels to already have been combined prior to the sales contract being executed and/or the appraisal being completed, so upfront communication is key to handling these situations.
We realize that qualifying for a USDA Loan may seem overwhelming, but we offer the unique experience and expertise to help with each step of the process.
Remember to take advantage of our expert second opinion service which is a great way to double-check where you stand for both pre-qualifications or those loans already in progress.
Just call or email to discuss your scenario and let show you the “Metroplex” difference.
Toll-Free: (800)806-9836 Ext. 280
Don’t forget, we are known for returning calls, replying to your emails, and responding to voice mails.
If you have not yet done so, don’t forget to download our USDA Blueprint for Success!