The Difference Between Vacant and Raw Land Loans
Raw Land Loans are meant to facilitate the purchase of wholly undeveloped pieces of property. They differ from vacant land loans on a number of points.
A Closer Look at Raw Land Loans
Raw land is generally defined as property that does not have any improvements on it whatsoever. This means it will not have such things as utility lines in place. It might not even have easy access to them. This type of land may not be reachable via paved roads.
Obtaining financing for raw land can be quite difficult because the prospect is risky for lenders. Since borrowers will face a lot of work in developing the land, their stake may not be as high. Seller financing or a cash offer are often your only viable options for purchasing raw land.
The Vacant Land Distinction
Vacant land loans are different in that they are meant to facilitate funding on properties that do have access to utilities or may already have improvements in place. Obtaining funding for vacant lots can still be a difficult process, but it is generally easier than dealing with the purchase of raw land.
When the desire to buy pristine property is in place, raw land loans might be required. Partially improved lots will generally be funded through vacant land loans.
Utilities Made Clearer
The proximity to power is usually self explanatory and a septic system can be installed most anywhere the soil perks. WATER is increasingly the determining factor in a loan being issued or not. Many banks are now requiring that land currently have access to water before they will lend. This can mean a city system, a community, shared, or private well.
I help clients purchasing in the Methow Valley explore their land lending options all the time- both locally and in Western Washington. I can help you too.