What Is a Land Improvement Loan?

Often, people are landowners sitting on land that can be developed. Some landowners sit on land to sell to someone else, harvest timber and pine straw, a hunting camp, retreat or they might want to build a nice home one day. Most of the time you will need to do some sort of improvements to your land. If you need to do a big improvement, you could need a land improvement loan.

First South Farm Credit, which was founded in 1916 is the perfect place to go when a landowner needs a loan. They offer financial services for rural communities, covering farming operations including crops, and livestock, assistance in financing rural home construction, and other types of rural property improvements. They offer services for landowners in Alabama, Louisiana and Mississippi.

“If you are playing or working in the dirt, we want to be in there with you as long as you are improving the value of that dirt, which is the collateral for the loan. Whether it be roads, barns, ponds, timber management as in thinning or clear-cutting, controlled burns or establishing wildlife habitat,” says Taylor Hart, manager of FSFC in Opelika, Al.

Land improvement loans do have standard financing terms. This 15% down payment can be either cash or the property (free and clear). As mentioned earlier, a land improvement loan can cover many things. Road construction and repair come under this loan and will also potentially increase the value of the property. These can include roads, trails, or small bridges that allow easier property access. “Opening up some roadways is an opportunity for increased access which adds value to a property,” explains Hart.

Other things it can be used for are timber management and property clearing. Landowners can use this timber as a long-term renewable revenue stream and harvest the wood section by section. If you clear-cut it all at once and use the property for agricultural land, food plots or replant seedlings.

Pond construction also falls under this type of loan. ” The general thought is that any type of water feature increases the value of a property whether it is for fishing, duck hunting, or irrigation of crops. Water has a way of relaxing people. We typically look at the cost as well as the value that will be added by the water feature,” Hart said.

Another item that can be considered is a collateral improvement which are things of value that are on the property. These are things such as replanting of seedling trees after harvesting them, pine straw harvest, clear cut to-open areas for food plots, controlled burns or fire lanes.

“In terms of pine straw harvest, typically you have to have longleaf pine and the implementation and management of the operation increases the value of the property because you have developed a stream of income,” Hart stated.

If you want to use the property in the future to build a home you can also get a loan to build. Depending on your profile and the amount of equity you have in the property you can obtain a loan for around 85% of the value.

If you are in the market for some land or have some land and need advice on what to use it for, check with a local realtor. A local realtor can help you through the whole process.

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New Changes in Urban Design and Development

Even though Hurricane Katrina only devastated the Gulf Coast and the Greater New Orleans area, the whole world felt her effect. It has been ten years since the horrendous storm blasted through the Gulf Coast and the lessons learned have become the model for cities around the world as they plan and prepare for severe weather and rising sea levels. In essence that one storm became the catalyst for

new changes in urban design and development around the world.

No one was prepared for the lives lost and communities lost by Katrina. The Urban Land Institute (ULI) realized that this was a wake-up call for all communities in the area of buildings’ resilience to storms. Buildings must be built with every detail looked at when facing the challenge of a major storm. Not only did New Orleans need to have many buildings rebuilt, but they also needed to be built better than before. Part of this process was not only to focus on the buildings themselves but the land and environment around the community. This was done by restoring marshland and wetlands that aid in absorbing floodwaters, building affordable houses with green technology, and using other means of building that do not solely depend on oil and gas.

According to Sarene Marshall, executive director for ULI’s Center for Sustainability, “The result is a city that is more environmentally sustainable, socially cohesive, and economically prosperous, and is as a result attracting new residents, businesses and investors.”

ULI studied other communities around the world who have also been proactive in their storm protection. These cities have focused on resilience and molding their infrastructures to climate

change. Small coastal towns to larger tourist oceanfront resorts have all been affected by the climate change which includes rising sea levels, extreme heat, drought and stronger storm activity. Marshall explained, “As the resilience movement has gained momentum, we are seeing innovative approaches to the planning, design, development, financing, and insuring of real estate.”

The Urban Land Institute (ULI) reported that cities around the world are building for resilience which is not only protecting from bad weather but also improving local and economic growth and quality of life. Resilient design strategies enable a stronger defense against extreme weather which makes communities healthier and more desirable places to live. How are communities doing this? They are taking a holistic approach. Cities are building developments that are walkable and mixed-use which encourage social interactions among neighbors.
 
The public and private sectors are also building community amenities such as parks, trails, and fitness centers which are also being used for neighbors to connect socially and to be used as emergency escape routes during a storm. Homes in these developments are not only able to withstand extreme weather but also reduce energy and water use which can cut utility cost.

ULI’s Marshall backs up this theory stating, “Being resilient means focusing on adaptation and flexibility of space, so that building uses can change over time to 1) meet the new needs and preferences of residents, and 2) be better equipped to withstand environmental and economic stresses.”

The design of a community can prepare it for severe weather. Not every community should be designed the same. There are a couple of factors to consider such as the types of risks faced and the scale of action. An example of this is considering strategies and risks for someone who is building in a flood zone. These could include raising electrical equipment above the first floor and using water resistant materials in lower levels of the home. ULI has a publication called “A Guide for Assessing Climate Change Risk” which will assist in choosing the correct strategies and actions to take when dealing with disasters. Basically it comes down to understanding the risks and tailoring a strategy for a specific community.

Thankfully ULI has been there for New Orleans during the rebuild after Katrina. ULI has provided guidance and assistance to New Orleans’ development industry through their “Resilience Strategies for Communities at Risk” where the relationship between built and human systems is considered when building housing in the Greater New Orleans area developments.

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