Thanks for the explanation, and it mirrors the explanation I got from the loan officer at my credit union.
On this point:
"What you're looking for is a "portfolio loan," where the financial institution keeps your loan on its own books. Some credit unions do this (mine does) in situations like yours. The interest will be commensurate with the credit union's guess of how easy your property will be to resell (both in the opinion of the underwriter and of the outside, independent appraiser) to pay for the risk but it can be done."
It was the credit union that said, "We could maybe get you a loan on the land if you can put 50% down." The bank I've been using for 20 years flat out said "no way, we only do land loans for businesses for new construction, and they have to have a plan and funding lined up to complete the construction".
It all seems vaguely rotten and corrupt, to me...but, well, I don't know the motivation for it. I'll just keep saving, and pay cash. Or maybe I'll buy land where it's cheaper. Maybe I won't always value living within biking distance of a city with good live music as highly as I do now.
Basically, as parent said, they're concerned that doing something oddball with the land will actually decrease its value or at least have some unknown effect on its value that they have no experience to evaluate.
Add to that, post-2008, most banks/credit unions are just going to err on the side of just not making the loan rather than making one which has some unquantifiable risk associated with it.
That said, it's all a bit arbitrary. I live in a relatively normal house on some very nice property but the house has enough quirks (it's very old) that I fully expect that whoever buys it some day will just build a new house.
On this point:
"What you're looking for is a "portfolio loan," where the financial institution keeps your loan on its own books. Some credit unions do this (mine does) in situations like yours. The interest will be commensurate with the credit union's guess of how easy your property will be to resell (both in the opinion of the underwriter and of the outside, independent appraiser) to pay for the risk but it can be done."
It was the credit union that said, "We could maybe get you a loan on the land if you can put 50% down." The bank I've been using for 20 years flat out said "no way, we only do land loans for businesses for new construction, and they have to have a plan and funding lined up to complete the construction".
It all seems vaguely rotten and corrupt, to me...but, well, I don't know the motivation for it. I'll just keep saving, and pay cash. Or maybe I'll buy land where it's cheaper. Maybe I won't always value living within biking distance of a city with good live music as highly as I do now.