Construction Loan to build on Owner Financed Land?

Hello, Wife and I are in discussion to purchase acreage (Kentucky) from family. This land is currently farmed, and we would continue that operation. We do want to build a house in next few years, which has been OK’d by planning and zoning.

Seller wants to finance the land to us.

This presents some advantages to us, namely lower down payment and lower interest rate. However, this contract would feature a lockout on prepayment. Seller likes this structure for a few reasons, such as spreading exposure to capital gains tax over time.

Would it be possible to get a home construction loan to build a house while the owner financing contract is in effect? Or would the owner financing lien not allow for a construction loan?

submitted by /u/Jealous-Percentage-4
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Hello, Wife and I are in discussion to purchase acreage (Kentucky) from family. This land is currently farmed, and we would continue that operation. We do want to build a house in next few years, which has been OK’d by planning and zoning. Seller wants to finance the land to us. This presents some advantages to us, namely lower down payment and lower interest rate. However, this contract would feature a lockout on prepayment. Seller likes this structure for a few reasons, such as spreading exposure to capital gains tax over time. Would it be possible to get a home construction loan to build a house while the owner financing contract is in effect? Or would the owner financing lien not allow for a construction loan? submitted by /u/Jealous-Percentage-4 [link] [comments]

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