Does anyone actually know which lenders will touch rural raw land without making you feel like a criminal

The balloon problem you hit in Fredericksburg is the real structural issue here, and the Hanover term with a renewal option is the closest thing to workable you will find in the community bank universe for a land banking hold. What I would push hard on with that Hanover lender is whether the renewal option is discretionary on their side or written as an automatic right in the note, because a discretionary renewal on a five year balloon is not materially different from a three year balloon if they decide the credit environment changed. Get that language confirmed in writing before you spend anything on due diligence.

The Farm Credit appraisal problem you ran into is worth understanding more precisely because it will follow you to other lenders. Rural fringe parcels outside Goochland that have no ag income and no residential improvement get underwritten to their highest and best use as the appraiser sees it today, not as a developer or land banker sees it in year eight. Timber value appraisals are not a Farm Credit quirk, they are what a state certified general appraiser produces when the parcel has no comparable sales in the growth corridor and no entitlement activity to cite. The way to fight that is to bring your own sales comp package to the appraisal engagement, specifically closed sales of similarly situated parcels where the buyer was paying a growth premium, and to document any county comprehensive plan language or zoning amendment activity in the Goochland fringe that supports a residential trajectory. What is the current zoning on the specific parcel you were looking at, and has Goochland County had any comp plan update language in the last two years that touches that corridor?

You have clearly done more homework on this than most people who've held land for years, so I'll add a few things rather than restate what you already know.

The Hanover bank's 5-year with renewal is probably the closest to workable for a land banking hold, and the thing to press them on is what triggers the renewal and whether the rate resets to market or stays fixed. A renewal that reprices at the lender's discretion in year five is a different instrument than one with a capped adjustment, and that difference matters a lot if rates are higher when you get there.

One option I'd suggest asking both banks about is a blanket note, where you cross-collateralize two or more parcels under a single loan. It gives the lender more security, which sometimes softens the down payment requirement or the balloon structure. Worth one direct question.

On the Farm Credit appraisal situation, the timber-value peg is a real constraint and you ran into it exactly as the strategy guide describes, these parcels don't score on productivity, they score on growth path, and most ag lenders are not set up to underwrite that thesis. I can't say with confidence whether other ACA branches handle this differently, so I'd want to verify that with two or three branches directly rather than take anyone's word for it.

Seller financing is worth keeping as a backup specifically for sellers who have held land long enough to have low basis and want installment sale treatment for tax reasons. A licensed CPA or tax attorney can explain why that makes some sellers motivated to carry paper on their own terms. That's not my lane to advise on, but it is a real reason the option keeps coming up.

What's the target hold period you're working from, and does the Hanover bank's renewal option cover that window?