Land loans compared: where to finance raw land

The short version

Land is harder to finance than a house: fewer lenders do it, and those that do usually want a bigger down payment and charge more, especially for land with no road, power or water. Where you get the loan depends on what you will do with the land. To build a home soon, look at loans that cover land and construction together. For farm or ranch land, look at Farm Credit and, if you have farming experience, USDA Farm Service Agency loans. For recreation or holding land, a bank or credit union land loan, Farm Credit if the land qualifies as agricultural land, or seller financing.

The options compared

Option	Who it fits	What to know
Bank or credit union land loan	Most buyers; land of any use	Federal supervisory guidelines tell insured banks to keep raw-land loans at or below 65% of value, so many banks ask for 35% or more down; credit unions and other lenders set their own limits
Farm Credit lender	Rural land, farms, rural home sites	Part of the federally chartered Farm Credit System; rural home loans cover open country and towns of 2,500 people or fewer; terms set by each association
USDA FSA farm ownership loan	Farmers and ranchers buying land to farm	For farming, not home sites or recreation; you must run the farm yourself and have at least 3 years of farm management experience in the last 10; direct loans (up to $600,000, 6.25% as of October 2026) also require that you can’t get enough credit elsewhere; guaranteed loans up to $2,343,000 through a lender; a down-payment loan program exists
USDA Rural Development (Section 502)	Buying land together with building a home	Not for vacant land alone; can cover the site as part of building or buying a home; income limits apply, the property must be in a USDA-eligible rural area, and the site needs all-weather road access
VA home loan	Veterans buying land and building a home	Generally not for land alone (one exception: a lot for a manufactured home the veteran already owns); can be used when buying land is combined with building the home
Construction-to-permanent loan	Buyers ready to build	One closing for land, construction and the final mortgage; needs plans and a builder
Seller financing (land contract)	When banks won’t lend	Terms negotiated with the seller; see the risks in our land contract guide

Run any offer through our land loan calculator to see the monthly payment and total interest, and how a bigger down payment changes both.

What lenders look at

• The land itself: legal access, utilities, zoning, and whether it is buildable. Raw land with none of these is the hardest to finance.
• Your plans: a home site you will build on soon is treated differently from land held for recreation or investment.
• The usual borrower checks: credit, income, debts and the down payment.
• An appraisal, usually based on recent sales of comparable land.

Ways to improve your terms

• Put more down, and ask about shorter terms.
• Choose land with access and utilities, or show a plan and budget to add them.
• Ask local banks, credit unions and the Farm Credit association that covers the county; rural lenders often know local land best.
• If you will build soon, compare a land loan now plus construction later with a single construction-to-permanent loan.

Government-backed options for land are covered in depth in our post on USDA and VA loans for raw land.

Quick answers

Where can I get a loan for land?

Banks, credit unions and Farm Credit lenders make land loans; USDA’s Farm Service Agency lends to experienced farmers buying farmland; sellers sometimes finance; and construction-to-permanent loans cover land plus building a home.

Can I use a VA or USDA loan to buy land?

Generally not for vacant land alone. Both can be used when the land is bought together with building or buying a home (VA also allows a lot for a manufactured home the veteran already owns). USDA FSA farm ownership loans are a separate program for farmers buying land to farm.

What is Farm Credit?

A nationwide network of federally chartered, borrower-owned lending cooperatives that lend to farmers and ranchers, owners of agricultural land, and rural homebuyers (one moderately priced rural home at a time, in open country or towns of 2,500 people or fewer).

Why are land loans harder to get than mortgages?

Raw land is harder to sell if a borrower defaults. Federal supervisory guidelines tell insured banks to keep raw-land loans at or below 65% of value, so many lenders want 35% or more down, and rates are often higher, especially for land with no access or utilities.

General information, not legal, tax or financial advice. Land rules differ by state and county; confirm with the county health or planning department, a real estate attorney or a licensed professional before you buy.