Updated November 2026. For buyers who want a lot, acreage or a homesite and need to borrow for it.
A loan to buy land usually comes from a local bank, credit union or Farm Credit lender, not a regular mortgage lender. As of November 2026, expect about 15% down for an improved lot, 25% for unimproved land and 35% for raw land, per Freedom Mortgage. Terms often run 10 to 15 years, at higher rates than a home loan.
Jump to: 🏠 Land types · 🪜 Step by step · 💲 Loan options · 🏦 Mortgage for land? · 🤝 Requirements · ❓ FAQ
Key takeaways
- The less developed the land, the more cash you need. Raw land can take about 35% down; an improved lot about 15%.
- One Farm Credit lender, AgSouth, finances up to 85% of the price or appraisal, whichever is lower.
- Government programs usually don’t finance vacant land on its own. FHA, VA and USDA construction loans can cover land plus a new home.
- For business land, an SBA 504 loan goes up to $5.5 million.
Land is harder to finance than a house. There’s nothing on it to live in or rent, and it’s harder to resell if the borrower stops paying. Here’s how to line up a loan anyway.
What kind of land are you buying?
Lenders sort land into three groups. Where your parcel falls drives the down payment, the rate and how many lenders will even talk to you.
| Land type | What it has | Typical down payment | How lenders see it |
|---|---|---|---|
| Improved lot | Road access, water, sewer or septic, power | About 15% | Easiest to finance |
| Unimproved land | Some access or utilities, not all | About 25% | Harder |
| Raw land | No road, no utilities | About 35% | Hardest; fewest lenders |
The down payment figures are from Freedom Mortgage’s land loan guide, read October 22, 2026. Real numbers vary by lender, credit and term. Some lenders ask for more on remote land.
Size matters too. Price per acre usually falls as parcels get bigger. Our guide to how acreage affects property value explains why.
How do you get a loan for land, step by step?
- Decide what you’ll do with the land. Building a home soon, farming and holding for later get different loans.
- Check zoning, road access, utilities and flood zone with the county before you fall for a parcel.
- Pull your credit reports and fix errors. A higher score widens your choices.
- Save for the down payment, plus closing costs, a survey and any soil or perc test.
- Call local banks, credit unions and Farm Credit lenders. Ask each one if they make land or lot loans in that county.
- Get prequalified, then make an offer with a financing contingency.
- Order the survey and title search, and let the lender order the appraisal.
- Compare the loan estimates side by side, then close.
Lenders will ask how you plan to use the land and when. A simple written plan, with a builder’s estimate if you’re building, makes the file stronger. Before you sign, read the 7 things to know before you buy a piece of land.
What type of loan do you need to buy land?
It depends on the plan. Here are the five usual ways to finance land, side by side.
| Loan | Best for | Typical down | Watch out for |
|---|---|---|---|
| Land or lot loan | Buying now, building later | 15% to 35% | 10 to 15 year terms, balloon payments |
| Construction-to-permanent | Building a home soon | Lender sets it | Needs a builder and plans up front |
| Seller financing | Rural parcels, lower credit | Whatever you agree | Get the note recorded |
| Home equity loan or line | Owners with equity | None on the land | Your house secures the debt |
| SBA 504 | Land for a running business | Lender and SBA set it | Not for personal homesites |
A land or lot loan from a local lender
Community banks, credit unions and Farm Credit associations make most land loans, because they know local land values. Terms are shorter than a mortgage, often 10 to 15 years, and the rate is higher. AgSouth Farm Credit, for example, says it typically requires at least 15% down and finances up to 85% of the price or the appraised value, whichever is less.
A construction-to-permanent loan
If you’ll build a home soon, one loan can cover the land and the build, then turn into a regular mortgage. For a tiny house, the loan depends on wheels or a foundation; see what a tiny house really costs. Freedom Mortgage notes that government programs usually don’t lend on vacant land alone. FHA, VA and USDA construction loans can include the land when you build. The U.S. Department of Agriculture runs rural housing programs, so check whether your area qualifies.
Seller financing
Many land sellers act as the bank. You pay a down payment, then monthly payments to the seller. Terms are whatever you agree. Get a written note and a recorded mortgage or deed of trust, and have a title company or attorney close it.
Home equity
If you own a home with equity, a home equity loan or line of credit can pay for land. Rates are often lower than a land loan. The catch: your house secures the debt.
SBA 504 and land investment loans
If the land is for an operating small business, an SBA 504 loan can fund land and buildings. The SBA says the maximum is $5.5 million. It’s not for personal homesites. Buying land purely as an investment, to hold and resell? Most lenders treat that as the riskiest case and ask for the biggest down payment, so price in 35% or more.
Can you get a mortgage for land?
Not a standard 30-year home mortgage, in most cases. Those loans are built for a house that’s already there. For vacant land you’ll use a land loan, or a construction-to-permanent loan that rolls the land and the build into one, then turns into a regular mortgage once the home is done.
One shortcut: if the parcel already has a home on it, even an old one, it’s a home purchase, and a normal mortgage may work. Lenders look at the home’s value and condition, not just the acreage.
How much does a land loan cost?
Expect a higher rate than a 30-year home loan, a shorter term and a bigger down payment. Here’s a simple example on a $60,000 improved lot with 15% down: you’d bring $9,000 plus closing costs and borrow $51,000.
Run your own numbers with Bankrate financial calculators before you shop. Plug in two or three rates and terms, because a 10-year term can almost double the monthly payment compared with a longer one.
Sell smarter
List your home on the MLS from $99
A flat fee instead of a percentage, and $0 to Beycome at closing. You stay in control of your sale.
Sell your home →Buy smarter
Get up to 2% back at closing
On homes listed by other agents, Beycome credits you up to 2% of the price at closing (1% kept, $1,499 minimum; not on FSBO homes or homes listed by Beycome sellers).
Buy a home →Tax treatment of land loan interest depends on how you use the land. The Internal Revenue Service (IRS) has separate rules for investment interest and for a home under construction. Ask a tax professional before you count on a deduction.
What are the land loan requirements?
Each lender sets its own, but these five come up every time.
- A bigger down payment. It’s the single strongest signal to a land lender.
- Good credit and steady income, with room in your budget for the payment.
- Land with road access, utilities and zoning that fits your plan.
- A survey, a clean title search and, if you’ll build, a perc test and a builder’s bid.
- A clear timeline. Lenders like borrowers who’ll build within a set period.
Before any loan, read every term. The Consumer Financial Protection Bureau has free tools for comparing loan estimates and spotting fees. If your score is low, our guide on buying land with bad credit covers owner financing and other routes.
Is it hard to get a land loan?
Harder than a mortgage, yes. Fewer lenders make them, and they ask for more cash and a clearer plan. But it’s very doable with a local lender, a solid down payment and buildable land.
If cash is tight, look at cheaper parcels first. Our guide on how to finance land compares cheaper ways to pay. Once you’re ready to build, compare home loans in how to choose the right loan type.
Where does Beycome fit in?
Buying a lot in Florida or Texas? Beycome Title can run the title search and closing, with a $99 settlement fee in Florida (prepaid on beycome.com) and $299 in Texas. It also closes in Michigan, Ohio, Illinois and Indiana.
If you’d rather buy a finished home, the Beycome buyer program has no upfront fee. It’s open to every buyer on homes listed by other agents (the commission credit can’t apply where no buyer-agent commission is offered, like most FSBO homes, or on homes listed by Beycome sellers). Beycome keeps 1% of the price (minimum $1,499) and credits the rest to you at closing, with lender approval.
Selling land you already own? A flat fee MLS listing puts lots and acreage on the major home search sites and the MLS, from $99 in most states (see your state page).
Frequently asked questions
How much down payment do you need for a land loan?
Often about 15% for an improved lot, 25% for unimproved land and 35% for raw land, per Freedom Mortgage in October 2026. Lenders set their own rules.
Are land loans hard to get?
Harder than home loans. Fewer lenders offer them, and they want more cash down and a clear plan. Local banks, credit unions and Farm Credit lenders are the best places to start.
Can you get a mortgage for land?
Usually not a standard 30-year mortgage. Vacant land takes a land loan, or a construction-to-permanent loan if you’ll build soon.
How do you finance land with no house on it?
With a land or lot loan from a local lender, seller financing, a home equity loan on a house you own, or an SBA 504 loan for business land.
Can I use an FHA or VA loan to buy land?
Not for vacant land on its own, usually. FHA, VA and USDA construction loans can include the land when you build a home on it.
Which banks offer land loans?
Mostly local ones: community banks, credit unions and Farm Credit associations. Call several in the county where the land is and ask for their lot or land loan terms.
How long are land loan terms?
Often 10 to 15 years, shorter than a 30-year mortgage. Some lenders use a balloon payment, so read the note carefully.
Can I borrow money for land with bad credit?
Sometimes. Owner financing, a co-borrower, a larger down payment or a small local lender are the usual routes. Expect a higher rate.
Rates, down payments and terms as of November 2026; they vary by lender, credit, land and location. The down payment figures are a lender’s published guide, not a quote. Beycome Title operates in Florida, Texas, Michigan, Ohio, Illinois and Indiana; title insurance premiums and other closing costs are extra. Buyer credit: no upfront fee; Beycome keeps 1% of the price, minimum $1,499; if the commission offered is below that, the buyer covers the gap at closing; the lender must approve the credit. General information, not legal, tax or lending advice.
Sources
- Freedom Mortgage, land loans guide, read October 22, 2026.
- AgSouth Farm Credit, land loan down payments, read October 22, 2026.
- U.S. Small Business Administration, 504 loans.
- Consumer Financial Protection Bureau.
- Beycome Title, settlement fees, October 2026.
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