To get a loan for land, find lenders that actively make land loans in that county (usually local banks, credit unions, or Farm Credit associations), prepare your credit, income records, and down payment, gather details on the property such as a survey, zoning, access, and utilities, then apply and complete the lender’s appraisal and title review before closing. Raw land is harder to finance than a lot with utilities.
This article is a practical checklist for borrowers. For background on terms and how land loans differ from a mortgage, see how land loans work. For a list of other payment options, see how to finance a land purchase.
Can you get a loan on land at all?
Yes, though fewer lenders offer land loans than home mortgages, and terms are usually stricter. Lenders consider land riskier than a house because it is harder to resell after a default. Your chances are best when the land has legal access, a clear purpose, and value that is easy to support with comparable sales.
Step 1: Know what kind of land you are financing
Lenders treat land in categories:
- Improved lots with road access and utilities at the lot line are the easiest to finance.
- Partially improved land with some access or utilities nearby is in between.
- Raw land with no utilities or road improvements is the hardest and usually needs the largest down payment.
Our explainer on raw land vs improved land helps you see where your parcel falls.
Step 2: Check your credit and finances
Pull your credit reports, fix any errors, and pay down revolving balances if possible. Lenders look at credit history, debt-to-income ratio, income stability, and cash reserves. Have recent pay stubs, W-2s or tax returns, and bank statements ready. Self-employed borrowers should expect to provide two years of returns.
Step 3: Save the down payment
Land loans typically need a larger down payment than home loans. The exact amount depends on the lender and land type; see our breakdown of land loan requirements. Having more down can also help with your rate and approval odds.
Step 4: Find lenders who make land loans
- Call local community banks and credit unions in the county where the land is located.
- Contact the Farm Credit association that serves the area for rural acreage.
- Ask local land agents and title companies which lenders close land loans regularly.
- If building soon, ask builders which lenders they work with for construction-to-permanent loans.
National online mortgage lenders often do not offer standalone land loans, so local relationships matter.
Step 5: Gather property documents
Lenders want to understand exactly what they are lending against. Useful documents include:
- The purchase contract and legal description.
- A survey or plat showing boundaries and access.
- Zoning confirmation and any land use restrictions.
- Information on utilities, or a perc test if septic is needed.
- Your plans for the land, such as a timeline to build.
Step 6: Apply and compare offers
Ask each lender for the rate, term, amortization, any balloon payment, fees, required down payment, and whether there is a prepayment penalty. Compare the total cost, not just the rate. Ask whether the land loan can be rolled into a construction loan later.
Step 7: Appraisal, title, and closing
The lender orders an appraisal and title search. If the appraisal comes in lower than the price, you may need to renegotiate or bring more cash. Title issues, such as unrecorded access or old liens, must be resolved before closing. Once approved, you close much like a home purchase.
How is getting a loan for raw land different?
For raw land, expect more questions about access, buildability, and your plans. Some lenders will not lend on raw land at all. Strengthen your application with a survey, a perc test, proof of legal access, and a realistic plan. If banks decline, seller financing is common for raw land.
What if your land loan application is denied?
- Ask the lender for the specific reasons.
- Try a lender that specializes in land, such as a Farm Credit association.
- Increase your down payment or choose a more improved parcel.
- Consider seller financing or a home equity loan.
- Improve credit or lower debt, then reapply.
How long does it take to get a land loan?
Timelines vary by lender, appraisal availability, and how quickly title and survey work can be completed. Raw land may take longer because appraisers have fewer comparable sales. Build extra time into your purchase contract’s financing contingency.
What questions should you ask a land lender?
- Do you lend on raw land, improved lots, or both, in this county?
- What down payment do you require for this type of land?
- Is the rate fixed or adjustable, and what is the amortization period?
- Is there a balloon payment, and when is it due?
- Are there origination fees, prepayment penalties, or requirements to build by a certain date?
- Can this loan convert into, or be paid off by, a construction loan later?
- What documents and property reports will you require before closing?
Write down the answers from each lender so you can compare offers on the same basis. A lender who regularly closes land loans in the area will usually answer these quickly and clearly.
Should you get pre-qualified before making an offer?
It helps. A conversation with a lender before you make an offer tells you roughly what you can borrow and what down payment you need, so you can focus on land that fits. Sellers may take your offer more seriously with a lender letter, and you can set a realistic financing contingency deadline in the contract.
Frequently asked questions
Can I get a land loan with bad credit?
It is harder. Some lenders may approve with a larger down payment, and seller financing may be more flexible on credit.
Do I need a land loan if I plan to build right away?
Not always. A construction-to-permanent loan may finance the land and construction together.
Can I use land I own as collateral?
Yes. Owned land can secure a loan or count toward equity for a construction loan.
Are land loan rates fixed or variable?
Both exist. Many land loans have adjustable rates or balloon terms, so compare offers carefully.