I've been trying to get a mortgage loan on a house with 3 acres, but as soon as they find out that it's zoned industrial,red flags go up. Does anyone know why this is?
2007-08-15 07:30:12 · 7 answers · asked by myopinion 1 in Business & Finance ➔ Renting & Real Estate
as of right now there isn't any factories or anything like that in the area. It's all homes and farm land. I don't really understand why they zoned it industrial for?!
2007-08-15 07:50:22 · update #1
Houses in areas zoned as industrial see a drop in value. The heavier the industrialization, the sharper the drop. So, the lenders fear that they may be unable to recover their money, should they ever have to repossess and sell the property. If you come up with a substantial down payment, they will be willing to lend, as their risk is diminished.
2007-08-15 07:37:01 · answer #1 · answered by KCNY1 4 · 0⤊ 0⤋
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2016-12-15 16:05:52 · answer #2 · answered by rushford 3 · 0⤊ 0⤋
It's not the loan officers, I can assure you of that. We only get paid when loans close.
We see this from time to time. A residential home ends up in an area that's rezoned as commercial. Your home then ends up being a "legal, non-conforming" property. It's grandfathered in as being ok for that area, but doesn't conform to current zoning.
The problem is, if your home were to burn down or otherwise get destroyed, most cities won't allow you to rebuild your home as a residential property.
Therefore, the lender loses the collateral for their loan.
So, the solution, if you can get your hands on it, is a "rebuild letter". It's a letter from the city stating that if the property was destroyed, it could be rebuilt as a residential property. Some cities will give them, some won't. Contact your city zoning office and talk to them.
2007-08-15 11:41:05 · answer #3 · answered by Yanswersmonitorsarenazis 5 · 0⤊ 0⤋
Probably because it can adversely affect the value of the residence. If a stinky factory went in next door, your property value would drop to near zero.
Addendum: The fact that there are no factories there now is relatively meaningless. The land is zoned industrial so any business that conforms to the zoning requirements can build there without further approval and you'll be powerless to try and stop them. What may be a bucolic setting today could be an open-pit sewer in 5 years.
IMPORTANT: Don't even think of contacting the spammers and scammers who post their e-mail addresses here! Most of them operate from internet cafes in Nigeria or Latvia and they'll rip you off blind given half a chance!
2007-08-15 07:35:26 · answer #4 · answered by Bostonian In MO 7 · 0⤊ 0⤋
Did they tell you that you can't get the loan? You may need to put on your selling cap with the mortgage banker. Sometimes all you need to do is explain the situation especially if everything around you is residential or commercial zoning.
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2007-08-15 07:47:53 · answer #5 · answered by Anonymous · 0⤊ 2⤋
If it is zoned industrial, the dwelling is considered commercial not residential. Call your local bank and ask for a commercial loan.
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