How to Buy acreage in Denton County Texas with Minimum Down

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How to Buy acreage in Denton County Texas with Minimum Down

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How to Buy acreage in Denton County Texas with Minimum Down

Purchasing acreage in Denton County Texas or really anywhere in Texas (I’m just biased concerning Denton County) is one of my favorite real estate purchase strategies.

Raw land vs land with an existing Home

📍 A big distinction needs to be made between buying acreage with no house on it versus buying acreage with a house on it.

So if you’re just buying raw land or just acreage with no house on it, you cannot get a traditional home loan. That means no Conventional, FHA, VA, USDA, it’s not possible.

You’re gonna have to go with, in my experience, a local bank and how I typically see that being done is it’s 15% – 20% down and then a lot of the times it’s an ARM, so it’s an adjustable rate mortgage. And I’m not a huge fan of those personally.

If you wanna buy acreage right now and you don’t want to have to save up 15%-20%, I recommend taking a shortcut. And that involves finding a property that has a house on it that has the number of acres that you desire. That way you can go in and put minimum down. You’re looking at 0% down (VA and USDA), 3.5% down (FHA), 3% – 5% down (Conventional). It just depends on the loan program.

And what’s really great is that there’s no limitation on acreage as long as there are recent sales or recent comps in the area. So what that means is if you’re looking for a property that has five acres, make sure that in that same general vicinity, there are other five acre tracks of land that have comparable homes on them.

Homes that that are similar in regards to square feet and the year they were built. These recent sales are what an Appraiser will use when you are in the Underwriting process to buy the home.

In Summary: If you are looking to purchase a few acres in the greater Denton area but don’t want to put down 20% you have options. Buying acreage with an existing home is my favorite way to acquire acreage. You can put minimum down and qualify for a traditional home loan which will have better rates and terms than a raw land loan through a local bank.