Top 6 Land and Lot Loans in Massachusetts

Key Concepts

• The option to secure land loans allows individuals to acquire land now and build later at their discretion.
• Land loans, also known as lot loans, do not have any requirements regarding when or if construction must occur.
• Unlike mortgages, land loans do not necessitate insurance coverage.

Massachusetts offers numerous advantages, ranging from the historic charm of Boston to the picturesque Berkshire mountains. Additionally, as a prominent part of the Eastern Seaboard and New England, it serves as an ideal location for professionals seeking the high quality of life associated with the New England region. According to the United States Census Bureau, Massachusetts boasts a land area of 7,801 square miles, which provides ample space for individuals searching for a place to reside in the Bay State.

However, those seeking homes in Massachusetts face highly competitive markets today. With a value of $102,214.31 per acre in Massachusetts, as per the New Estimates of Value of Land of the United States, prospective residents may discover that purchasing a plot of land and constructing their own homes is a more affordable alternative.

Massachusetts land loans, also referred to as lot loans, differ slightly from construction loans in Massachusetts. Construction loans prove advantageous when undertaking renovations or immediate construction, whereas lot loans afford individuals additional time and the freedom to pursue their desires regarding their newfound land.

Advantages of Acquiring a Land Loan in Massachusetts

Typically, when searching for a home, homebuyers focus on existing properties. Nevertheless, given the exorbitant property prices prevalent in the United States and Massachusetts, obtaining one's "perfect" home may prove unattainable.

Usually, this would result in compromising and settling for a smaller or less desirable property. Fortunately, an alternative exists. Individuals who desire to purchase property but cannot find or afford their dream homes can secure land loans to acquire vacant lots and construct homes at a later time.

Thus, not only does this negate the need for settling, but it also expands the possibility of affording real estate in more upscale neighborhoods than previously considered. Lastly, land loans serve as excellent options for those interested in constructing retirement or vacation homes.

6 Outstanding Massachusetts Land Loan Lenders

While several lenders exclusively offer land loans for residential purposes, other programs extend to recreational or agri-business acquisitions.

1. Rockland Trust

Rockland Trust, a full-service bank founded in 1907, caters to members in Rhode Island and Massachusetts. The bank offers various loans for construction and land development, encompassing commercial real estate construction, land acquisition and development, and builder financing.

We inquired with Rockland Trust regarding their vacant land loan product and here is the information they provided:

• Available for commercial projects in Massachusetts and Rhode Island
• Commercial Real Estate Construction Loans: Construction of retail stores, office buildings, industrial or manufacturing plants, apartment complexes, or mixed-use projects
• Land Acquisition and Development Loans: Acquisition of residential or commercial land, as well as the infrastructure development and construction of single-family or commercial improvements
• Builder Financing: Construction of single-family homes, condominiums, subdivisions, and short plat developments

When you are prepared to connect with a loan officer, utilize our form to efficiently identify land and lot loan programs that align with your specific circumstances.

Webster First Federal Credit Union was established in 1928 and presently serves the Webster, Douglas, Dudley, and Worcester regions of Massachusetts by offering financial services to its members. The credit union provides several loan products, including land loans, to facilitate property and home acquisition.

We contacted Webster First Federal Credit Union to discuss the details of their land loan program, which you can find below:

- There are terms available for a duration of 1 to 10 years.

- You can finance up to 75% of the purchase price.

- There are no penalties for prepayment.

- If desired, the loan can be converted into a construction loan at a later date.

When you're ready to get in touch with a loan officer, you can use our form to quickly find land and lot loan programs suited to your specific circumstances.

3. BankFive

Established in 1855, BankFive is one of the independent community banks in the SouthCoast region that offers land and lot loans to potential homeowners. With a total of 13 full-service branches and 4 lending offices in Massachusetts and Rhode Island, BankFive has a land and lot loan program to cater to the needs of prospective homeowners in the area.

We reached out to BankFive for more information about their land loan product, and here's what they shared:

- They provide land and lot loans for both investors and homeowners looking to purchase land or lots.

- BankFive also offers construction loans to facilitate the home-building process.

- In addition, they have rehab loans available for financing fixer-uppers and renovations.

When you're ready to connect with a loan officer, you can use our form to quickly find land and lot programs that match your specific circumstances.

4. TD Bank

TD Bank is a comprehensive financial institution that offers various financial products, including investments, wealth planning, and private banking services. TD Bank has a considerable lending capacity, which allows them to provide loans for property and land purchases, as well as the purchase and renovation of homes.

We contacted TD Bank to discuss the details of their land loan program, which you can find below:

- They can finance land purchases as part of a construction project.

- During the construction phase, their construction loans have an interest-only structure.

When you're ready to connect with a loan officer, you can use our form to quickly find land and lot loan programs that match your specific circumstances.

5. BayCoast Mortgage

BayCoast Mortgage Company offers mortgage services in multiple states, including New Hampshire, Massachusetts, Rhode Island, Connecticut, Pennsylvania, New Jersey, Maryland, Virginia, North Carolina, South Carolina, and Florida. As a full-service mortgage company, BayCoast Mortgage provides a variety of mortgage products to suit everyone's needs.

We reached out to BayCoast Mortgage to discuss the details of their land loan program, which you can find below:

- Loan payments are spread out over a 20-year term.

- They offer a 5/1 ARM, where the interest rate is fixed for the first 5 years and adjusts annually thereafter.

- A minimum down payment of 20% of the land value is required.

When you're ready to connect with a loan officer, you can use our form to quickly find land and lot loan programs that match your specific circumstances.

Founded in 1922, Alltrust Credit Union has been providing services to residents for over 100 years. It is one of the largest credit unions in the state, offering a range of loan options and banking services, including land loans specifically designed for acquiring buildable lots within the region.

We contacted Alltrust Credit Union to engage in a discussion regarding the specifics of land loans. You can find the details below:

- Purchasing or refinancing options are available.

- Fixed terms of 15 and 10 years are available.

- The land must be suitable for construction.

When you're ready to connect with a loan officer, utilize our form to efficiently find land and lot loan programs tailored to your unique circumstances.

Is a land loan in Massachusetts a viable option for you?

If you aspire to enter the real estate market in a sought-after neighborhood or acquire land to transform into your dream vacation home, a land loan is a practical choice. Various options such as raw land loans, unimproved land loans, and improved land loans should be taken into consideration.

However, if you require a move-in ready home, a land loan is not suitable. In such cases, a mortgage loan from a traditional lender would be more appropriate. In the event that you discover an ideal parcel of land through the NMLS, you can explore all available loan options for your home purchase and construct your dream home on your own property. By understanding the loan terms, including monthly payments and interest rates, you may realize the potential benefits of a land loan.

A land loan allows you to secure the desired land before finalizing your construction plans, granting you ample time to refine and perfect your design. This option provides flexibility that is often lacking in the traditional mortgage route, where choices are typically limited. While not all borrowers will find the loan terms of a land loan appealing, those seeking a primary residence they can be proud of may need to explore alternatives beyond home equity loans or lines of credit to make their purchase feasible.

When considering alternative options such as adjustable rate mortgages, jumbo loans, home construction, or land loans, it is advisable to thoroughly research the underwriting and application processes for each one.

Are there any downsides to land loans? They may require a substantial down payment. However, the advantages of constructing your own custom home on your own timeline may outweigh this inconvenience. Additionally, land loans often result in cost savings on insurance, as they do not necessitate the same insurance or PMI as mortgages.

Therefore, if you are unable to find what you're seeking in the housing market, it may be time to take matters into your own hands.

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