Any suggestions on a lender or other suggestions that can clear up my confusion?

[Eldis1970]

This isn't really about building just yet but I thought this was the best place to ask. I've been doing some reading about financing the purchase of land. I already have the lot picked out and it is in a gated development, with water and power already. I'm just having trouble sorting out the lender stuff. I read many national lender don't do land purchases and it's better to go local, as they know the area.
I also read that many land loans require 25-50% down for raw land loans but land that is developed or finished (roads, water and power access) down payments can be as little as 10-20%. I am now finding a lot of variation among lenders in terminology. One I looked at just has "land loans" regardless of development. Another requires 20% down for "land loans" and 10% down for "lot loans". There are also "construction  loans" of various types. It gets very confusing. I am looking at a lot in Idaho and trying to get 10-20% down. Any suggestions on a lender or other suggestions that can clear up my confusion?

[rothbard]

Gated communities tend to be hostile to small houses and tend to have onerous covenants, I looked at quite a few and none of them would accommodate a countryplans DIY kind of scenario, so read carefully the title search discovery documents.  If you are building yourself it will be incredible difficult to get loans for construction. 

If finances are tight consider someplace with no utilities in bum****landia, with no HOA or covenants, and loose build regulations. Haul water, and build shed and slowly establish infrastructure as money comes in.

[RandyRE41]

To help clear up the terminology confusion: the reason you're seeing different down payments is entirely about the bank's risk.

• Raw Land Loans (25-50% down): This is for land with absolutely nothing on it.. no roads, no power, no sewer. Banks view this as highly speculative, so they want a lot of your cash in the deal.
• Lot Loans (10-20% down): This is exactly what you are looking at. Because the lot is in a development and already has water, power, and road access, it is considered "build-ready" or an "improved lot." The bank feels much safer lending on this, hence the lower down payment.
  

As for lenders, absolutely skip the national banks like Chase or BofA.. they generally hate land loans. Your best bet is to Google "Credit Unions" or "Community Banks" in the specific Idaho county where the lot is located. Local portfolio lenders actually want to finance local growth and will have the 10-20% lot loan products you need. (Also, Rothbard is 100% right.. read those HOA covenants carefully before you buy to make sure they allow your specific build plans!).

One longer-term tip regarding "improved" lots: If you plan on eventually using this property as a rental or investment (like an Airbnb/STR), keep a detailed paper trail of what you pay for the lot and the utilities/infrastructure.

While raw land itself can't be depreciated on your taxes, all those "land improvements" - like the grading, utility hookups, driveway paving, and fencing - absolutely can be. You can use a tax strategy called cost segregation to significantly accelerate the depreciation on those improvements and save a ton on taxes. I've used SMF Cost Segregation Advisors for my projects.
 The nice thing about them is they will run a free preliminary benefit analysis for you upfront, so you can see exactly what your tax savings would be before you ever commit to doing a full study.

Good luck with the Idaho lot hunt! Stick to the local credit unions and you'll find the financing you need.