Land Loan

A land loan is a financial product used to purchase land for the purpose of building a home or other structure.

What Is A Land Loan?

A land loan is a specific type of mortgage that is used to finance the purchase of a piece of raw land with no improvements on it. These loans are typically used by individuals or companies that are looking to build a new home or develop the land in some way. Land loans typically have a higher interest rate and require a larger down payment than traditional mortgages, as the lender is taking on more risk due to the lack of a physical structure on the property. These loans typically have a shorter repayment period and may require the borrower to begin making payments on the loan before construction on the property is complete.

The Benefits of Land Loans

  • Allows for ownership of land
  • Can be used for investment or development
  • Offers potential for appreciation
  • Potential for tax benefits

Who Should Consider a Land Loan?

  • Individuals looking to purchase land for development or investment
  • Landowners looking to refinance existing land mortgages
  • Agricultural businesses looking to expand operations or purchase land for farming purposes (exclusions may apply)

Eligibility Guide

  • Have a credit score of at least 640
  • Have a debt-to-income ratio of 43% or less
  • Have proof of income
  • Have a down payment of at least 35%
  • Have a clear plan for the land’s use
  • Be able to afford the monthly loan payments

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