It is one thing to get a loan to buy a Atlanta house for a home, but it is quite another to get a loan for land (as well as for a multi-family unit or commercial property). You’ll have to have a bigger down payment in most situations and leap through a lot of hoops. And the whole thing for a first-timer can be pretty overwhelming. So here’s how to get a Atlanta loan for property, multi-family, or commercial real estate.
Getting a Loan for Land in Atlanta
Many individuals want to purchase undeveloped property so that they can create a custom home from scratch. But having a Atlanta land loan raises some problems that you need to be aware of.
When attempting to secure a loan for property to build on, the chief challenge borrowers face is that there is no house on the land to act as collateral for the loan. Bare land is much harder to sell than a house if you happen to default on the loan.
That implies that to get a Atlanta loan for property , especially to find appropriate terms, you can need to look at alternative financing. Such choices that are feasible are:
Owner financing may be a reasonable choice for a loan for land if the seller / owner is willing to sell. This will be a deal between only two parties, so conditions, including anything from “the down payment to the interest rate,” will be negotiable.
LOCAL CREDIT UNIONS AND BANKS
“Usually, local banks and credit unions look more favorably on land loans than do the great behemoths. Due to their local knowledge of the land, they can also give better terms. Similarly, to prove creditworthiness, a prospective borrower would need to provide a loan package with land specs and plans, as well as personal financial details.”
You may be eligible for federal assistance in the form of a USDA Loan if the land meets the location criteria. Usually, these loans have limited conditions and very good terms.
HOME EQUITY LOAN
You will be able to leverage the equity in that property with a home equity loan if you have an existing property, which would usually get you better terms than a regular loan for land or building loan.
Just bear in mind that it is more difficult to get a loan for land to build a house on than the regular mortgage application process. Lenders need mapped borders, and you may need to review zoning and land-use regulations, as well as access to utilities and public roads. The more the land is improved, the lower the down payment and borrowing costs you require.
Getting a Loan for Multi-Family in Atlanta
Getting a loan for a multi-family unit is much more involved and provides fewer options than a loan for land in Atlanta, particularly when it is strictly an investment property. You would not have access to government-backed loans if it is to be an investment property and the minimum down payment would be higher.
The down payment sum depends on the loan program, but here are some examples that are representative:
- Duplex – 15%
- Triplex – 20%
- Fourplex – 25%
One positive thing about having a multi-family loan is that the loan cap is higher than for a land loan. Another advantage to buying a multi-family home is that without going into jumbo loan territory (which comes with higher interest rates), you can get a more expensive property. A higher lending cap equals more units.
Having a bigger loan, of course , means that you’ll need more sales to qualify. But to help you apply, you will be able to leverage the future rental income (although you can use only 75% of the rental income as qualified income). Contact your nearest agent to find out more about this.
Getting a Loan for Commercial Real Estate in Atlanta
And it can be much more difficult (and stressful) to get a commercial real estate loan than a land loan or a multi-family loan. The only way to do it is with a commercial mortgage loan, but even without assets or cash to secure them, they are usable.
Usually, business real estate loans are placed into the acquisition of existing or new assets. They may also be used in the development , construction or reconstruction of a physical property or land after the fact. In addition, on an existing commercial property, you can refinance a loan.
Moreover, as an person, you can not be able to get a loan for commercial real estate. And some lenders can require the space to be occupied by you.
Commercial real estate loans are often very high, so lenders usually need a large down payment in order to help mitigate their danger. This can vary from between 15% and 30%.
The popular types of loans for commercial real estate are
- “SBA loans to commercial real estate, including 7(a) and 504 loans to the Approved Construction Company (CDC)”
- Conventional commercial mortgage
- Commercial bridge loan
- Hard-money loan
The steps to take toward getting a commercial real estate loan include:
- Getting your credit in order
- Shopping commercial loan lenders
- Applying for the loan
The Agent Advantage
It should be reasonably clear, then, that a loan would be complex for land in Atlanta or for a multi-family or for commercial real estate. To help you to handle all the intricacies, it takes a professional real estate agent. So if you’re ready to take the plunge and get a land loan, contact us at for a multi-family, or commercial real estate.
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