Down payment loans?

[DaveB]

I'm hoping that someone here might be able to point me in the right direction. Back in the 40s my grandfather purchased a block of land and subsequently gave blocks of land to close family members over the years, including my Dad and uncle. My sugar house is located on my Dad's property where I also have the bulk of my maples. My former uncles house and property have come on the market and I have an opportunity to acquire it, IF I can finance it. It's been out of the family for about 20 years.

This all came all of a sudden and I was just not prepared financially. My Dad offered as collateral all his back woods which forms one of the property lines of the land. My idea was that I would merge the two properties and double the size of the lot that I was looking to buy, thus giving me equity in it. I've since learned that banks would not look at it that way and that they don't look at collateral like they used to. It all boils down to the existing purchase and I have to decrease the loan to value which means that I need a down payment that I don't have.

Is anyone aware of any programs where I could obtain a grant or loan to help with the down payment? I could have it in about 6-8 months but the sellers just want the place sold and have said that they don't want to wait more than a few of months. This would be a real opportunity to re-unite these two properties and give me more trees and space for other crops, including space to make value-added maple products.

I'm hoping someone can help! Thanks.

[GeneralStark]

I would certainly call your local (FSA) USDA office to inquire about their loan options. The FSA has multiple loan options and I believe they do give money for land purchases for agricultural purposes.

[Walling's Maple Syrup]

Have you tried Farm Credit East or do you have a branch in your area? I have found they are pretty good to work with. I know of a couple of instances (mine included) where they have used land as collateral.
Neil

[DaveB]

I would certainly call your local (FSA) USDA office to inquire about their loan options. The FSA has multiple loan options and I believe they do give money for land purchases for agricultural purposes.

Thanks. I have an inquiry out to the local loan liaison. This will be my backup plan right now.

Have you tried Farm Credit East or do you have a branch in your area? I have found they are pretty good to work with. I know of a couple of instances (mine included) where they have used land as collateral.
Neil

That is good to know! I sent them an inquiry yesterday and am waiting to hear from them. I like having some options and this would be a good one to keep in mind. There are actually based in the town next to me.

I also found out that Connecticut has a down payment assistance loan program that might help as well. It's designed specifically for people that can afford the mortgage but don't have the savings for the down payment - that's us right now. If that falls through, I'll see about Farm Credit East and using the land as collateral.

At least I have some options now!

[MISugarDaddy]

Another possible option might be a temporary equity loan on your current home to cover the down payment. If you feel you will have the funds in 6 to 8 months, you could use them then to pay off the equity loan.

[gmcooper]

I would recommend checking will all options now and not wait for an answer from one before moving on. Banks and lenders can be extremely slow at making decisions these days. Find out what are your best options right from the start.