Land in Lieu

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Land in Lieu

Post by Tandra » Thu Nov 11, 2004 3:05 pm

Could someone please explain to me how land in lieu works? I have some land that is family owned and I am interested in putting a home there. Also, is it possible to do this type of transaction without so great credit? Does Palm Harbour homes offer "in house" financing in this situation? I am in Houston, Texas, if that matters. Please help. Thanks.


Re: Land in Lieu

Post by Mark » Thu Nov 11, 2004 4:47 pm

It means you are using the value of the land in lieu of a down payment.
To do so, the land will have to be either deeded to you, or your name added to the deed.

It shows the bank you are serious about the transaction, it also means if you default, the bank gets the home AND the land.

Depending on the home type and financing, you may have no option but to own the land the home sits on.

The way I understand based on the paper I've seen...

Purchase price for home : 50,000
Value of land : 10,000
Total purchase price : 60,000 (even though you own the land..)
equity down payment : 10,000
Financed amount : 50,000

Adding the value of the land in increases the purchase price of the home, which means it may also 'cost' more than it is appraised for.


Re: Land in Lieu

Post by rmurray » Fri Nov 12, 2004 5:51 am

Mark has explained this type of finance close to the same way that I would..

Land in lieu of cash downpayment..means that the bank will give you down payment credit for equity in land that YOU own..The land will actually have to be yours...that means the family will have to transfer it to you...and if you do not pay..the land will belong to the lender..

Palm Harbor has 2 company owned mortgage companies..also many other lenders call on PH because they want the business..When land is involved there are progeams for those with damaged credit...There are NOT programs for any damaged credit...Large tax liens...recent bk (in less than 12 months)..recent large repos...current late accounts will not get financed anywhere..

My suggestion would be to go to your PH sales location..let them pull your 3 cb files and give you to the general manager if the sales person needs additional advice...They can tell you what needs to be done to get a home...Sometimes it can take a while to get done..I have never seen anyone who really wants a home take more than a year..even the worse credit can be done..

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