FHA Loans: Buying Land
There are several reasons why a house hunter looking for a home to purchase with a VA mortgage might want to buy a piece of land. In times when the housing market is favorably inclined towards new construction loans, some buyers might want a government insured loan for a proposed construction or new construction purchase; others might want to buy a piece of land for a manufactured home or mobile home.
As with many other parts of the FHA loan process, there are some do’s and don’ts to be mindful of when buying land as part of an FHA mortgage. There are plenty of pro-consumer laws enacted to protect buyers who want to own land, but there are also some good, common sense things buyers can do to protect themselves regardless of those laws. Some buyers purchase land from out-of-state, which makes the first rule of buying property more challenging.
Even so, it’s never a good idea to purchase land without having inspected it first. Buyers should treat a land purchase the same as they would the home itself–who would buy a house without having a look at it first? The same principle should guide a land purchase.
The FHA recommends doing some homework on the developer of the land–what is the developer’s reputation in the local area? Can someone there recommend them? What does your lender or real estate agent say about them. Applying for an FHA mortgage loan means you’ll be meeting plenty of people who might know who is reputable and who isn’t. Ask for an opinion.
Never give in to high-pressure sales tactics, especially those conducted over the telephone. Always insist on reading all contracts