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Yes. Specialized lenders can give you a construction loan that covers both the purchase of land and the building of your home. These are typically short-term loans meant to cover the period of construction. You can take a construction-to-permanent loan at a higher rate that is fixed.
The FHA construction-to-permanent loan, also called the FHA one-time close construction loan, allows you to build a home from scratch. You can use it to buy land, finance construction costs and cover lender fees. This loan combines the features of a short-term construction loan with a standard, long-term FHA loan.
Applying To Get A Construction Loan You will need to provide the construction loan lender with various documents, such as the construction plan, budget, and timeline. Additionally, you will also need to submit documents that verify your income, credit score, and financial history.
FHA loans require that the loan does not fund the purchase of excess land, which is described in HUD 4000.1 as land that is not needed to serve or support the existing home. There is no specific acreage limit, and the appraiser may be required to make a value judgment depending on the circumstances.
Getting a construction loan when you own the land Owning the land on which you plan to build can be a significant advantage when applying for a construction loan. Lenders often view this as a positive factor, as it demonstrates your investment in the project. The land can also be used as equity in the loan.
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People also ask

The amount youre allowed to borrow with a land equity loan is usually expressed as a percentage of the lands appraised value. Its common for lenders to limit borrowers to 85% of the lands value. Heres how to calculate your potential land equity loan amount: Multiply your lands value by 85% (0.85)
FHA Loan Options But there are FHA loans that allow you to build or renovate a home. The FHA 203(k) Rehabilitation Loan is one choice, and FHA One-Time Close construction loans are another. The 203(k) loan comes in two sizes, and the smaller version may be perfect for some who want to renovate themselves.
The short answer is yes, your approach is fine if it goes along with a more comprehensive financial plan to make the whole thing happen. Land is not an investment unless theres oil or gold underneath. It is land that you plan on developing to build your home on.

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