We consistently hear from home builders that it is hard to find good lots to build on. Part of the issue is that financing for land purchases can be hard to come by. The purchase of land for development is generally considered higher risk so even though we have a housing shortage, traditional lenders tend to shy away from these projects. There may be some good parcels out there, but they too often sit undeveloped due to lack of financing. This, in turn, makes it difficult for builders who need land for their new projects.
We decided to buck the trend and recently closed a loan with Odyssey Homes, Inc. to acquire and develop land in Isanti, MN. The property consists of approximately 62 acres or 173 lots and is an extension of a neighborhood that is actively building and selling new construction homes. A portion of the property is partially improved allowing for a quick completion to make lots builder ready. We see this as a win – win project. Builders get lots to build on, new inventory gets added to the community and we provide the financing to get it all started.
This project is good news for the City of Isanti. The city is a young, vibrant, growing community in East Central Minnesota with a population of just under 6,000 (2017) and median age of 31. The city is also projected to have strong housing demand through 2025.
In October 2014, an independent research organization, Maxfield Research Inc., completed a Housing Needs Analysis for the East Central Minnesota Region. As of June 2014, there were 234 homes listed for sale in Isanti County. At that time months’ supply of inventory was 4.1. It is likely that number is even lower today as we have seen months’ supply of inventory drop at both the national and state level in the past few years. General occupancy demand in Isanti County is projected to be 1005 units between 2020 and 2025 (74% owned). Read more here.
If you need financing for a new construction project, get in touch. Please visit us at www.ccm-finance.com or call Steve Nolander at (612)-255-0808.
CCM-Finance lending services include loans for new home construction, land/lot acquisition, land development and fix & flip homes.