Mr_Business_Casual

I can help with this and feel free to call me if you need further explanation than this: 225-975-3014

First you calculate the houses "Expected Value" which is as simple as adding the Land Value + Cost to Build. You can get a cost to build estimate from the builder. Typically lenders require 10% down on Contruction; which is the same as saying Max 90% Financed (like me; I work for EFCU Financial a Credit Union in Louisiana that does Land / Construction Loans).

So if you have Equity in the Land, you subtract it from the down payment obligation. Here is an example:

Land Valued at $100k
Land Loan Bal at $55k
Cost to Build at $250k

$100k + $250k means we expect the house to appraise for at least $350k once complete, right?

So 10% down of $350k is $35,000... Meaning if you only owe $55k on that Land that's worth $100k then you have $45k that will take care of the downpayment.

In this example, you'd bring NOTHING to the table to close on your construction and get the building process started. Because the Equity would eat up all of the closing costs and 10% down payment.

Josh Romine
EFCU Financial
225-975-3014

I might be able to help you with yours then. I work at EFCU Financial (Credit Union) and we do 100% financing on something land like this. Throughout all of Louisiana... Plus we typically allow for a 20yr Amortization on the payment if the loan amount is $50k or more. You can call me on my work cell if interested. JoshR@efcufinancial.org 225-975-3014