I am hearing from a lot of clients that their banks are no longer financing land. I am finding that other local lenders are cutting back on their land loans by charging higher interest rates and/or requiring higher down payments. Some of these moves seem a little drastic to me. It’s unfortunate that these nationwide banks can’t look at the markets that are performing well (like Leavenworth) and exclude them from their ‘hide in the bunker’ mentality. It seems to me that cutting off good business in a good market is a poor way for a bank to recover. The real surprise to me is watching some of the other community banks that see the same market conditions we see and yet are still pulling back from land loans. It's as though they have been reading USA Today or something, instead of taking a drive around town. Buildable land in Leavenworth may be hard to come by, but that is kind of the point; the limited supply keeps the prices up, hence it is a good investment, and good for us to lend on.
So if Geordie has helped you find that perfect piece of land, but you have been disappointed by the response from your bank, keep calling around; we’re still out there with loans up to 90%, and 30 year fixed rates as well as ARMs and Interest-only.
