[chiph]

I have a friend who lives in a rural area. He'd like to build a house on some land he owns that is unsuitable for farming (too steep) but he is unable to get a construction loan from the bank as they will not write a loan that is secured only by the property. Incremental construction might be the only way to do it (assuming the county will issue him a building permit that would span 5+ years).

Being debt-free within a few years of the house being completed has a lot to be said for it. But when a loan payment is 80% or more interest at the start, that's a lot of profit for a lender to give up - they're not exactly going to be jumping at the opportunity to write those loans.

[rdtwo]

Banks don’t Usually hold loans. The loans are typically packages and sold as bundles to institutional investors and banks get a cut of the deal with minimal risk. But to do that banks have to follow rules on what the packages look like so only certain products get loans and everything else isn’t worth dealing with

[Handytinge]

This may be specific to whatever country you're in. The major 4 banks in mine hold loans.

[bombcar]

Often in those cases you build a minimal “setup” perhaps not even technically legal for habitation - thing barn with power and septic.

Then with that in place you modify it toward a house.

Or drag a mobile home onto the lot for temporary.

[gscott]

He should check this lender https://www.umpquabank.com/ I have been watching some videos from a local builder and he says they will do off-grid construction loans.