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AAFMAA Blog

Buying Land? We’ve Got You Covered

2022-08-22

If you’ve been home shopping lately, you know it’s not easy. New listings are at record lows, construction of new homes has slowed, and homes for sale are scooped up fast — in an average 61 days (January 2022 data). That is the fastest pace Realtor.com has recorded since it began tracking the metric in 2016.

That market reality has got some buyers — and lenders like AAFMAA Mortgage Services LLC (AMS) — thinking outside the box.

"We're homebuyers, too, and we want to provide something for servicemembers and Veterans who are having trouble finding a house to buy but may want to buy a plot of land instead and eventually build a home,” explains Stacey Daniels, AMS’s Chief Operating Officer and Executive Vice President.

Related: Where to Find Affordable Land and How to Get a Construction Loan

Financing Property

If you’re thinking about building someday, this may be a good time to buy the land, Daniels notes.

Our Land Advantage LoanSM can be used to purchase up to 20 acres to build a primary residence. You’ll need a credit score of at least 680 and be able to put 25% down.

The land must be zoned for residential use, accessible (with a road on at least one side), and meet the minimum water and sewage requirements.

You would qualify for the land loan just like a purchase loan and make payments on it each month. “When you’re ready to build, you’d get a construction loan, which pays off your land loan,” explains Daniels. Typically borrowers pay interest only payments during construction.

Related: How to Finance a Home Construction

Smart Investment

A land loan works well in today’s market, especially for borrowers who want to build their own home. "And even if they never build on the land, it can be a good investment when they sell or pass it on as part of their estate. There’s a lot of flexibility that we think will appeal to people in the market today," says Daniels.

We’re Here to Help

Whether you’re just thinking about buying, ready to start home-shopping in earnest, or thinking about refinancing, a Military Mortgage Advisor will be happy to provide you with an honest and fair comparison of your mortgage options, including a wide range of affordable mortgages designed to meet your needs.

Ensuring AAFMAA Members obtain the best mortgage possible is our mission. Get your free mortgage assessment today or give us a call at 844-246-7930!