Obtaining financing for these structures???

[ToddSInGA]

Another newbie question here:

What types of financing is available for these types of structures?

I'm the typical renter whose high rent and lower income makes is difficult to save any real money, despite every possible cost cutting method (CFB's for lighting, hot water heater at 120, minimal cable,etc.) so a large down payment is impossible. I looked at other (less expensive) apartment complexes in my area but some of them were downright scary! With my not too great credit getting a traditional mortgage is out of the question, although there are supposively first time buyer assistance programs here in GA, especially for folks in my situation.

I've looked at lenght for a small starter home but everything I've found is either in a really bad area, needs excessive work, or won't accept FHA (most likely my only option here) or all of those things combined!!! The idea of building a smaller structure that could be expanded down the road sounds great, and hypothetically getting a $60,000 mortgage SHOULD be easier than trying for double that. I'd be willing to exchange a longer commute for a less expensive living arrangement. The building ideas presented here are brilliant but is getting it financed going to be harder than hitting the lottery??? LOL

Has anyone here dealt with this and what advice can you offer?

Thanks in advance

[CREATIVE1]

If you're looking at a rural area--and lots of places qualify, check out the USDA loan programs---at this site:
http://www.usdaloans.com/

Otherwise, there are lease-option arrangements where part of your rent goes towards a down payment, and you have typically one or two years to exercise the option.  For some people, this allows time to repair their credit. Check out this site:  http://www.realestateabc.com/answers/option.htm

First time homebuyer programs usually require you to take a class or classes.  In Florida I've dealt with this company: https://www.naca.com/index_main.jsp

[phalynx]

One thing to consider, although it is certainly not for everyone, is to pay cash for it as you go.  If you are building it yourself, you'll find that cash as you go will usually keep pace with your construction speed, if you build slow like me.

[n74tg]

Ditto what Phalynx said.  Beg or steal, but don't borrow if you can help it.  Really put your mind to it and figure out a way to NOT have to get that mortgage.  Paying for that house three times, even if you build it yourself is still such a waste. 

Whatever you do, good luck with it, and did anybody around here say we like pics, lots of pics. 

[ToddSInGA]

Happy Holidays!!!

I'm in a situation where a $50-60,000 mortgage is probably at my upper limit based on income and credit so I'm limited. My rent is rather high so saving for a down payment will be difficult, but the longer I rent the more money I throw away. Ideally a bi-weekly mortgage would work out best for me, and really I just need to have a place that I can live in. Right now I'm in a fancy apartment that really should be a two bedroom but instead has a odd layout and lots of wasted space, including a dining room that's strictly ornamental.

I would like a 2 bedroom, and a garage (attached or not) would help protect my car and add value to the property. Like a number of you here a wooded lot sounds great (I hate cutting grass...what a waste of time!!!) and since I'm downsizing my lifestyle anything fancy is just extra clutter for me.

At one point I live in a one bedroom apartment with no tv, a mattress to sleep on and just a few possessions. It was rough in some ways but after a while I was able to furnish my place for free from stuff other tenants threw out when they moved. I have enough furniture for a full place (including a washer and dryer) so all I need is a fridge and a stove. If I could almost halve my living expenses I could pay off my other debts faster and then do some upgrading if desired.

[CREATIVE1]

Mortgages for new homeowners (not refi's) are possibly going as low as 3 to 4 percent.  Based on the lower interest rate, you can afford a bigger mortgage--or, have lower payments.  It's a buyer's market.  Go for it! 

[NM_Shooter]

There is probably no way to get a loan on just raw land with no collateral.   

Save your dimes to buy the land, and put a small trailer on it... (do you have a spousal unit /  offspring to house?)  Even a small RV trailer would work. 

Start building with cash, or once you own the land and have a trailer on it, see about a construction loan to build a small house that could be enlarged later if you desire. 

No matter what.... don't give up the dream. 

-f-

[considerations]

Some people are willing to sell their land on a private contract, over time. It's like a mortgage, but usually only lasts about 3 -5 years.  I did this on the first property I bought.  By the time 3 years was up, I had electricity, phones, built the septic system and had a functioning well (paycheck by paycheck). I lived in a (ugh) old trailer. Then I had the house built, using the payment history of the contract as part of my credit qualifier, and the land as collateral to get a mortgage. 

This second piece of property, the one I'm on now, I bought with cash from the proceeds of the project above.

This time, I moved on with a 5th wheel, a portapotty, a small gen. and started again. But this time, I'm paying cash to build as I go. It's slower, and the house is much smaller, but no mortgage.  Works for me.

In this economy, you may find land that people need to get rid of (for the money) and are willing to discuss payments.  This arrangement is often done without the normal credit review just because it is harder for private parties to access the credit checks available to banks and businesses.

Older RV's are pretty cheap, you just have to watch out for signs of neglect and deterioration. Some are pristine, just old.  Leaks are bad.

If you cannot afford a septic system right away and the codes don't allow an old fashioned out house, you can rent a port-a-potty... or drag the RV to a dumping station when needed. (I rented a portapotty).  The greywater can go into a dry well that you can dig by hand. Some jurisdictions don't care about your grey water, but most are pretty picky about the black water.

Electricity can be batteries (usually already in an RV) and a small gen (like a Honda 1000) to keep them charged, until you can get electricity to your "home site" or stick in solar panels or whatever. 

Water of course depends on where your land is and what may be available, like "city" water, or a well.  Sometimes, the land already has some improvements, like the sewer, water and electric.  Someone else may have tried to develop it, but didn't get to actually build the home.  This can be a good thing for you.

Build a shed for the possessions you want to hang on to for your house.

Rachet the finances down as tight as possible. When I see a latte stand I think about how many nails I can buy for the price of that latte.  I make lattes at home now and buy the nails instead.

Then there is the survey.  I encourage you to look for survey records before you buy, and try to find the markers.  Owners have faulty memories about where their bare land starts and ends, and real estate agents have no vested interest in knowing that precise info.  It can be pretty awful to find out after a purchase that the boundaries are not where you thought they were,   especially if you were excited about a creek or pond that you thought was on the property you are buying, or that you do not have an easement to access the land, and there can be rules about how far from a property line you can place a structure.  Surveys are good things to have.

Nothing is insurmountable, I just keep putting one foot in front of the other in the direction I've decided to go.

[CREATIVE1]

I see that I'm going on about mortgages while everyone else is talking about building for cash.  But IN THIS MARKET and especially in certain parts of the country I know you can often buy land with a house cheaper than buying land and building your own home.  For example, in parts of Florida homes that sold for $225,000 within the past two years are short selling for $50,000.  We're talking 1,800 square feet, double garage, fairly new, good shape.  Even without considering the cost of the land, you would have to spend less than $30.00 a square foot on the building to spend similar $$$, and that can be difficult.  An added fact: in some first time homeowner programs, the agency can actually contribute up to $60,000 directly towards your purchase.  Free money, you just have to live there for awhile.

I have always built and remodeled homes myself and largely with cash, and am doing it again. But if I'd had a crystal ball, I would definitely NOT be pursuing my current course. So please look at all your options, as these are very unusual times both for the real estate market and in the lending industry. 

[MountainDon]

Good points Creative1.

The times, they are a changing. Again

[wildbil]

I too have been worried about where to get the money from. I too am on a very tight budget, and I have a wife and daughter. Sometimes I start to lose hope that I'll never be able to get out of this house and into my smaller efficient home I'd like to build. But if I have to, I'll live in a less than 200sq ft home while I save and eventually build the new home. It can be done! We just have to turn into hyenas and pick out the stuff noone else wants.

[ToddSInGA]

Right now foreclosures are probably going to be my best option, or short sales as was mentioned above. I know two mortgage brokers and they've advised me that if I'm not too picky I'll have more options. Georgia does have some programs for first time buyers, especially in the low income catergory like I am right now. I should know in a few weeks what to expect.

I've also spoken to a few realators and they all have told me that I'll probably have a tough time finding anything under $100,000...naturally thier commission may have something to do with that?

I'm not going to give up, but I have to be very careful about what I do.

[FrankInWI]

Hey Considerations.... you said:

"Nothing is insurmountable, I just keep putting one foot in front of the other in the direction I've decided to go."

Wow....that stopped me in my tracks.  Simple yet powerful.  My best accomplishments were done when I was in that mode.  Sometimes I have a hard time getting in that zone... heck, MOST times I have a hard time getting in that mode.  But when I do, everything is possible.

[CREATIVE1]

.

I've also spoken to a few realators and they all have told me that I'll probably have a tough time finding anything under $100,000...naturally thier commission may have something to do with that?

Where are you looking in Georgia?

[ToddSInGA]

I'd ideally like to live in either Jackson, Barrow, or Hall counties as close as possible to the Gwinnett county line to ease my commute. I don't expect gas to stay this cheap for a long time so that has to be a consideration. Something close to I-85 or I-985 would be a great choice.

If building isn't a option yet a foreclosure is a possibility, especially since there are a number in this area. I just need something really simple, like a 2 BR/1 Bath Cape Cod on a slab or something like that which doesn't need a tremendous amount of work. I'm not afraid to do some painting or basic stuff like that, and I have some friends with experience in DIY projects that would help out from time to time. On my income (I'm considered low income under Georgia guidelines) the max mortgage will probably be around $60-70,000. Gwinnett county has a down payment assistance program that I'd be eligible for, and there's also the Federal tax break.

Realistically I just need to get my foot in the door, after that I should be ok.

[CREATIVE1]

Go to www.realtor.com    There are 875 single family homes listed under "Atlanta" from $50,000 to $75,000. 

[ToddSInGA]

Thanks, there were quite a few in my price range.