Land Carry Loans

Land carry loans are loans extended to finance the acquisition or carrying of vacant land, whether improved or raw.

Frequently, planning and approval of new residential or commercial developments (including owner occupied facilities) can extend 18 months to 2 years for more complicated projects. These pre-development land acquisition facilities are extended to developers as part of a pre-planned and imminent development project, or to owners of businesses or home owners in the process of building an owner occupied facility or home. These land carry loans have many characteristics that are similar to speculative land loans, in that the eventual use for the property extends into the future, and may be subject to changes in the economic environment. However, land acquisition for imminent development is accompanied by strong development activity, including the preparation of feasibility studies, and the initial stages of regulatory approval.

Before construction can begin on unimproved or vacant property, it is necessary to acquire a number of permits and authorizations from local governmental agencies. Zoning regulations must be considered as well. Where necessary, variances from those regulations must be requested, evaluated by zoning officials and allowed or denied depending upon the projected impact on surrounding properties and values. A land carry loan, by definition, is a lending arrangement that provides funding during the period between initial acquisition of vacant property and the final stage of construction activities. CNF Exchange can help construction firms make their case to lenders and investors in order to obtain the land carry loans they need to manage the costs of property acquisition prior to the completion of their project.