source:
  type: regulation
  id: hud-4000-1-programs-and-products-building-on-own-land
  authority: HUD Handbook 4000.1 — Programs and Products - Building on Own Land (06/17/2019)
  description: "HUD Handbook 4000.1 section \"Programs and Products - Building on Own Land\". Gap-fill\
    \ (verbatim, title-diff). \n"
obligations:
- id: hud-4000-1-programs-and-products-building-on-own-land-full
  canonical_id: hud-4000-1-programs-and-products-building-on-own-land-full
  section: HUD Handbook 4000.1
  description: "Programs and Products - Building on Own Land: 8. Programs and Products - Building on Own\
    \ Land (06/17/2019) \n \nk. Building on Own Land (06/17/2019) \nBuilding on Own Land refers to the\
    \ permanent financing of a newly constructed dwelling \non land owned by the Borrower and may include\
    \ the extinguishing of any construction \nloans. \nThe Borrower must…"
  type: do
  tags:
  - regulator-direct
  - section-complete
  - hud
  - 4000-1
  - curated
  primary_source:
    tier: 1
    authority: HUD Handbook 4000.1 — Programs and Products - Building on Own Land (06/17/2019)
    source_class: hud-handbook-4000-1
    source_url: https://www.hud.gov/hud-partners/single-family-handbook-4000
    snapshot_id: 8c03836f77f317e1
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:411430f29b13f9b54a2ebb0e6f6e7087ecd2b90d0da22eb0c8c792eaa2d7d0df
    paragraph_quote: "8. Programs and Products - Building on Own Land (06/17/2019) \n \nk. Building on\
      \ Own Land (06/17/2019) \nBuilding on Own Land refers to the permanent financing of a newly constructed\
      \ dwelling \non land owned by the Borrower and may include the extinguishing of any construction\
      \ \nloans. \nThe Borrower must have contracted with a builder to construct the dwelling. The builder\
      \ \nmust be a licensed general contractor. \nThe Borrower may act as the general contractor, only\
      \ if the Borrower is also a licensed \ngeneral contractor. \niii. Calculating Maximum Mortgage Amount\
      \ \nThe Mortgagee must use the lesser of the appraised value or the documented Acquisition \nCost\
      \ to determine the Adjusted Value. \nThe maximum mortgage amount is calculated using the appropriate\
      \ purchase Loan-toValue (LTV) percentage of the lesser of the appraised value or the documented\
      \ \nAcquisition Cost. \nThe documented Acquisition Cost of the Property includes: \n• the builder’s\
      \ price or the sum of all subcontractor bids and materials; \n• Borrower-paid options and construction\
      \ costs not included in the builder’s price \nto build; \n• interest and other costs associated\
      \ with a construction loan obtained by the \nBorrower to fund construction, if applicable; and \n\
      o the lesser of the cost of the land, or appraised value of the land, if the land is \nowned six\
      \ months or less at case number assignment; or \no the appraised value of the land if the land has\
      \ been owned for greater than six \nmonths at case number assignment or was received as an acceptable\
      \ Gift. \nFor Manufactured Housing, the builder’s price to build includes the sum of the cost of\
      \ the \nunit(s), the cost to transport the unit from the dealer’s lot to the installation site,\
      \ and all \non-site installation costs. \n\n8. Programs and Products - Building on Own Land (06/17/2019)\
      \ \n \niv. Minimum Required Investment \nThe Borrower may utilize any cash investment in the Acquisition\
      \ Cost of the Property \nor land equity to satisfy the MRI in accordance with Calculating Maximum\
      \ Mortgage \nThe Mortgagee must document that the cash investment was from an acceptable \nsource\
      \ of funds in accordance with TOTAL or manual underwriting requirements as \nIf the land was given\
      \ as a Gift to the Borrower, the Mortgagee must verify that the \ndonor was not a prohibited source.\
      \ \nThe Mortgagee must obtain standard gift documentation with TOTAL or manual \nunderwriting requirements\
      \ for any Gift of land. \nv. Borrower’s Additional Equity in the Property \nThe Borrower may not\
      \ receive cash back from the additional equity in the Property, but \nthe Borrower may replenish\
      \ their own cash expenditures for any Borrower-paid extras \nover and above the contract specifications\
      \ and any out-of-pocket expenses not included in \nthe builder’s price. The Mortgagee must obtain\
      \ an itemization of the extras and expenses \nand the cost of each item. \nvi. Required Documentation\
      \ \nThe Mortgagee must document the date of purchase of the land by obtaining the Closing \nDisclosure\
      \ or similar legal document. \nThe Mortgagee must obtain evidence that the funds used to pay Borrower-paid\
      \ options \nwere derived from an acceptable source. The Mortgagee must obtain an itemization of\
      \ the \noptions, expenses, and cost of each item. \nThe Mortgagee must comply with New Construction\
      \ requirements."
    drafter_attestation: Verbatim section from snapshot 8c03836f77f317e1; boundary human-curated + substring-verified
      (2026-07-23).
  judgment: false
