Land & Lot Loans: Financing for Your Dream Property

What Are Land & Lot Loans?

Land and lot loans provide financing for buyers looking to purchase vacant land for future home construction, investment, or recreational use. These loans are ideal for borrowers who want to secure land now but aren’t ready to build right away.

Unlike traditional home loans, land loans often come with higher down payments, shorter loan terms, and slightly higher interest rates due to the additional risk lenders take on.

Types of Land & Lot Loans

There are different financing options depending on the type of land and how soon you plan to build:

✔ Raw Land Loans – For completely undeveloped land with no infrastructure (roads, utilities, or structures). This is the hardest type of land to finance due to its risk.

✔ Unimproved Land Loans – Land with some infrastructure (road access, electricity, or water lines nearby), but still requires development.

✔ Improved Land Loans – Fully developed land with utilities, roads, and zoning approvals, making it easier to finance.

Key Features of Land Loans

✔ Loan Terms – Typically 5-20 years (shorter than traditional mortgages).

✔ Down Payment – 15%-30% depending on the land type and lender.

✔ Interest Rates – Slightly higher than home mortgages (due to the land being collateral with no home built yet).

✔ Credit Requirements – Most lenders require a 660+ credit score, though some allow lower scores with larger down payments.

✔ Zoning & Use Restrictions – Land loans may require proof of future use (e.g., home construction plans).

Land Loans vs. One-Time Close Construction Loans

If you’re planning to buy land and build soon, a One-Time Close Construction Loan may be a better alternative. This loan finances both the land purchase and construction in a single loan, saving you from needing to refinance later.

What You Need to Qualify for a Land Loan

✔ Good Credit (660+ recommended)

✔ Strong Down Payment (15%-30%)

✔ Proof of Income & Financial Stability

✔ Property Details (Zoning, Survey, Access to Utilities, etc.)

Pros & Cons of Land Loans

Pros

✔ Secure land now and build later

✔ Allows for investment or recreational use

✔ Some loans offer low down payment options

Cons

❌ Shorter loan terms & higher interest rates

❌ Lenders may require a larger down payment

❌ Riskier than traditional home loans

When to Consider a Land Loan

✅ You want to secure land now and build later.

✅ You’re buying vacant property as an investment.

✅ You’re interested in recreational land (hunting, farming, vacation property).

Get Started with a Land Loan Today

If you’re looking to finance land for your future home, investment, or recreational use, we can help. Reach out today to discuss your financing options and secure your piece of land!