[Cob] Cob financing??? and rant

[Leslie Moyer]

David Boyer wrote:

>   Tried to work with an "organic vision" realtor in another county who effectively dismissed the whole idea of cob construction permitted because:
>1. We will need 25% down payment to purchase  bare (agricultulturally  zoned, which is what we want) land in Oregon. 
>  
>

I think this is pretty much standard practice among lenders--I don't 
think it has anything to do with the price of land in Oregon, per se.  
We were able to find one local (Oklahoma) lender who only required 20% 
down, but with a higher interest rate.  Interest rates, by the way, are 
also higher for vacant land--our rate is almost 2% higher for vacant 
land than if the land had a house on it and it was, therefore, a home 
mortage loan. 

There were a couple of lenders who would loan a higher percentage on the 
land if we began a construction loan at the same time.  We weren't ready 
to begin building yet, so we didn't want to go that route. 

You might be able to find a lender who would lend on a cob....it can't 
hurt to ask.  (I say, blithely, knowing it isn't ME making 100 phone 
calls to laughing potential-lenders. <g>)  I wouldn't take the realtor's 
word for everything....he/she benefits when he/she closes the deal so 
he/she wants the quickest route to that sale.  I called 40 different 
lenders and got 40 different answers.

The only other suggestion I have is to see if the land (and your plans 
for it) would qualify for an agricultural-land set-aside program.  That 
is, if you buy prime agricultural land and you are going to *keep* it as 
agricultural land, there may be a land preservation organization you can 
work with to assist you in the purchase. 

Our land didn't qualify (because it is heavily forested), but this 
organization would have been our best-shot at a lower-interest loan: 
http://www.farmcreditloans.com/.  I don't know what the equivelent 
organization is in your state, but it used to be called the "Federal 
Land Bank Association" so I assume there is an Oregon office that's 
similar.  Even still, federal laws wouldn't allow them to lend more than 
20 or 25% (I forget which), but we would have qualified for a 30 year 
loan on it, making our payments much more reasonable.

Good luck!  I know it's a tough spot to be in!

--Leslie