You know the scene: You’re driving in the back roads of Northern Minnesota, and you see a sign that says “Land for Sale.” Your mind wanders as you dream of what could be.
You could buy that for hunting land or to camp on it. You could snowmobile there or maybe build a cabin later. Your family—unplugged from all electronic devices—could sit around a campfire and tell stories of bowhunting, grouse hunting, or deer hunting. Where some people see unimproved land, you see pristine, wild forest. It’s beautiful, this vision of yours—and it’s not as far off as you think.
Land financing with favorable terms can be difficult to get for bare (or unimproved) land. Since this type of loan has collateral that can be classified as unimproved or raw land, some lenders deem it a speculative investment. Lenders place a higher risk level on this type of collateral since the property is not being consistently used. Those lenders think that makes it easier for the owner to walk away, and therefore require a down payment of 35% and charge higher rates than typical home mortgage rates.
Northview Bank has been a leader in financing bare land for decades. Northview Bank does not consider land used for hunting or other recreational purposes speculative as long as the borrower has enough income to support the debt at proper debt-to-income ratios. We offer 20% down programs to qualified borrowers. Click here for full disclosures. For qualified buyers on smaller loans the down payment required may be even less.
Some lenders require some type of development plan before they will finance bare land loans. Northview Bank views bare land loans in two distinct classes: development loans and hunting/recreation loans.
Northview understands that many bare land parcels in Minnesota and Wisconsin have been passed down from generation to generation. If you buy one, you may plan to pass it down to your children. A hunting or recreational land parcel represents the family retreat, a place where the stories of the past years’ hunts or trips are shared from generation to generation around the campfire. Why should a lending plan change your heritage?
Northview Bank offers competitive 20% down loan programs on bare lots. Three-, five-, and 10-year balloons amortized over 20 years are available. We also offer a fixed-rate option of 15 years. Other terms and options available upon request. Click here for full disclosures.
To get started, fill out our easy-to-complete bare land application. We’ll need your last two years’ W-2 or tax returns, and a current paystub.
Northview offers quick closing and quick approval—we can even have you approved the next business day, contingent on final appraisal and title work. In most cases we can close in three weeks and have you enjoying your new bare land purchase.
The purchase of new bare land may seem out of your reach, but there are a couple of options to consider to make it more affordable.
Conservation Reserve Programs (CRP) are land conservation programs administered by the Farm Service Agency (FSA). The largest private lands conservation program in the United States, CRP improves water quality, reduces soil erosion, and increases habitat for endangered or threatened species. Landowners who enroll their land in CRP are paid per acre, reducing costs of ownership.
Another possible option would be a selective timber harvest with bank concurrence. Aspens, a common tree in Minnesota, are considered a “40-year tree.” Beyond that 40 year mark, they become prone to falling in storms. You may want to consider a timber cruise, which will tell you what your trees are worth. Though pricing may vary, income from a timber harvest can be significant. White oak, red oak, white pine, and red pine are other species typically purchased by logging companies.