The Problem: Purchasing Two Continuous Parcels Connected Together

If you want to purchase a single parcel of land, the process is fairly simple. There is a clearly-defined, well-understood system for purchasing a single piece of property. Whether that property is for personal use, development, or commercial gain, buying a single parcel of land is done every single day, and there are many lending organizations that can help.

But what if you want to purchase two continuous parcels that are connected together? Can you get one loan or do you need two loans, one for each parcel? What loan programs will provide solutions to this problem, and what are the requirements for those that do?

Let’s look at a typical example of this situation. It’s common for a buyer, often a developer or company but also homebuyers, to want to purchase two parcels that are connected. There may be a structure that runs across both parcels but is not a main dwelling unit; it might be an accessory dwelling unit.

Fannie Mae

Fannie Mae has the most detailed guidelines for purchasing multiple parcels, so it is often the best solution to this problem. To use a loan backed by Fannie Mae, the parcels must be conveyed in entirety. This basically means that the entirety of the parcel must be sold in the transaction; it can’t be divided up and sold as part of the transaction. For example, you couldn’t use a single loan to purchase the entirety of one parcel and half of the adjoining parcel, the entirety of both must to be sold.

The parcels involved must be connected to each other, unless they meet a specific exception: if they would be adjoined but there is a road running through them, it would qualify. Continue reading The Problem: Purchasing Two Continuous Parcels Connected Together