Why Owner Financing Exists Here
Here's the situation nobody explains on the mainland: banks generally won't write mortgages on raw land in Puna. No house, no comps they trust, small loan amounts they can't be bothered with. So the market solved it the old-fashioned way — sellers carry the loan themselves. Around 60% of our sales close this way, and it's been standard practice in these subdivisions for fifty years.
How a Typical Deal Looks
| Item | Typical Range | Example ($40,000 lot) |
|---|---|---|
| Down payment | 15–25% | $8,000 (20%) |
| Interest rate | 8–10% | 9% |
| Term | 5–10 years | 8 years |
| Monthly payment | — | ~$470 |
| Credit check | Usually none | None |
| Prepayment penalty | Almost never | None |
Rates run higher than a bank mortgage because the seller is taking the risk a bank refused. In exchange: no underwriting, no appraisal fees, no six-week approval process, and closings that happen on schedule.
What Actually Protects You
This is the part to pay attention to. A proper owner-financed deal here is not a handshake or a rent-to-own arrangement. At closing:
- You get the deed. Title transfers to you at closing, recorded with the State Bureau of Conveyances — same as a cash sale.
- The seller gets a mortgage. A purchase money mortgage (or agreement of sale) is recorded against the property, exactly like a bank would record one.
- Escrow handles everything. Documents drawn by the escrow company's attorneys, payments typically serviced through a collection account, so there's a neutral record of every payment.
If anyone — here or anywhere — offers you land "on contract" where the deed stays in their name until you finish paying, walk away and call us so we can be judgmental about it together.
Questions Sellers Will Ask You
There's no formal underwriting, but sellers carrying paper want reasonable confidence. Expect to be asked about your down payment source and general situation. A bigger down payment buys flexibility on everything else — a buyer putting 30% down can usually negotiate the rate.
Run the full math before committing: payment + property tax (mercifully low on Ag land here — often under $300/yr) + your build savings. The lot payment should be the boring part of your budget, not the scary part.
Current Owner-Financed Listings
Most of our current inventory offers seller carry — look for the "owner fin." tag on the listing cards, or just ask. Terms above are typical, but every seller is different and everything is negotiable, especially in the wet season when nobody's walking lots.