This piece of legislation changes the size of real property that is eligible to be financed with a deed of trust in Idaho from forty acres to eighty acres, and clarifies the 80 acre limit. House Bill 491 should increase lending options for certain properties between 40 and 80 acres in Idaho.

The law before July 1, 2008 allowed Deeds of Trust to be utilized on properties inside city limits (regardless of size), and properties up to 40 acres outside city limits.  The House Bill 491 (affective July 1, 2008) changes the 40 acre limit to 80 acre limit for properties not principally used for agriculture.  The legislation also eliminates some vague language in the statute – essentially clarifying that the limit is actually 80 acres at the maximum for these properties.  (b) any real property not exceeding 80 acres, regardless of its location, provided that such real property is not principally used for the agricultural production of crops, livestock, dairy or aquatic goods; or (c) any real property not exceeding forty acres regardless of its use or location.

Deeds of Trust are a financing method most commonly used in the conveyance of real property in Idaho.  The vast majority of loans in Idaho are secured with a Deed of Trust. Until this legislation, properties over 40 acres that are not completely located inside a city have to be financed with a Mortgage rather than a Deed of Trust.  Idaho is a lien theory state that uses mortgages.  Part of the problem and the need for this legislation is there are a limited number of companies that are willing to provide Mortgages on these types of properties.  In contrast, there are a large number of companies that will finance the property with a Deed of Trust.  Because of the requirement for Judicial Foreclosure with a mortgage compared to notice and sale on a deed of trust, most lenders do not want to use the mortgage.  

This legislation opens up more lending options for properties between 40 and 80 acres in Idaho.

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Gail Heist is the Managing Broker at NAI Kowallis & Mackey, a full service Boise commercial real estate brokerage and part of the world's largest network of commercial real estate offices consisting of 5,000 professionals in 325 offices in 55 countries around the world. 

Gail can be reached by phone at 208.385.9876 or by clicking the contact Gail link to the left of this post.  Click here to view our current inventory of commercial properties.