House Finance
Is there any restrictions when trying to finance a house owner occupied on 20 acres?
This is for a conventional loan.. Most comps around are on 1-2 acres.. This is in California.
yes there will be a couple of issues. The comps must be comparable, so they must have close to the same amount of acreage as the house you’re buying. The other issue will be the land value to building value ratio which means the land can only make up 30% or so of the overall value. For example, if the purchase price is $200,000 then the 20 acres can only account for $60,000 (+/-). The final issue for a conventional loan will be how far away the comps are, if the appraiser has to go 5+ miles to find true comparables, the lender will have issues because it would be considered rural.
You may be better off trying to purchase this home with a USDA loan. In addition to covering rural areas this loan also allows for 100% financing without monthly mortgage insurance.