Loan Options & LTV Considerations

Conventional Land Loans:

• 📌
  Competitive rates and structured terms from institutional lenders.
• 📌
  Loan-to-Value (LTV) typically ranges from 50% to 70%, depending on zoning, location, and borrower profile.
• 📌
  Best suited for residential, commercial, and agricultural land purchases with strong financial backing.

Private Land Loans:

• 📌
  Flexible underwriting criteria with customized solutions for unique land types.
• 📌
  Higher LTV potential—often up to 80%, depending on asset viability and lender risk tolerance.
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  Faster approvals and funding timelines—ideal for investors, developers, and landowners needing speed.

Understanding Land LTV & Risk Factors:

Unlike traditional real estate, land is considered riskier collateral, which often results in lower LTV ratios. Here’s why:

• ✔️
  Lack of Cash Flow – Raw land doesn't generate revenue, making repayment dependent on borrower strength.
• ✔️
  Market Volatility – Land values can fluctuate based on zoning, demand shifts, and economic conditions.
• ✔️
  Development Uncertainty – Without entitlements or infrastructure, land carries higher feasibility risks.

LTV Expectations by Land Type:

• 📉
  Raw Land: 30-65% LTV (lower due to lack of improvements).
• 🏗️
  Entitled Land: 60-70% LTV (higher if infrastructure is in place).
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  Improved Land: 70-80% LTV (utilities, roads, zoning approvals improve financing options).
• 💰
  Private Lending: May offer higher LTVs (up to 80%) but with different underwriting standards.

Why Choose Montgomery Lending?

• ✅
  Expertise in land financing, including adaptive reuse strategies and feasibility analysis.
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  Access to both conventional lenders and private capital sources, providing tailored solutions.
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  Strategic term sheet negotiations to align financing with long-term investment objectives.

Navigating Lower LTV Scenarios:

In some cases, land loans may have LTVs as low as 30%, particularly for raw or high-risk properties. Borrowers can mitigate risk by:

• 1️⃣
  Providing strong collateral or additional guarantees.
• 2️⃣
  Securing entitlements and approvals before financing.
• 3️⃣
  Partnering with private lenders for more flexible terms.