There are a few different types of raw land.
The type of raw land you are purchasing will have a large impact on the financing that will be available to you. Furthermore, the zoning of the land will likely determine the financing options available.
Main Types of Raw Land
- Residential zoning: Land already zoned for dwelling units. This type of land is often the easiest to obtain financing.
- Commercial zoning: This land has been zoned for commercial use. Examples of this type can range – from storefronts, restaurants, or office space. Depending on the surroundings, an Environmental Service Assessment (ESA) may be needed.
- Industrial zoning: This land is often used for manufacturing purposes. It will likely require an ESA due to the nature of use the land may have.
- Agricultural zoning: This is land zoned for agricultural use, and is often sold in large parcels. Depends on the region.
Lending is Impacted By These Zoning Types
All of the above zoning classes have a direct impact on the value of the land you have purchased, as well as the future permitted use. However, a parcel of land can be rezoned for alternative purposes. Consequently, these changes can be costly and time-consuming.
Check out some additional factors to consider when purchasing raw land.
If you have a parcel of land that you’re interested in acquiring and would like to see your financing options, book a meeting with a trained mortgage professional today.
