The single most common surprise for first-time land buyers is discovering that the 30-year, 5%-down financing they had in mind doesn't exist for a vacant lot. Raw land is a different asset class to a lender: there's no house to repossess and resell, land takes far longer to sell in a downturn, and a borrower who runs into trouble will stop paying on empty land long before they stop paying on the home they live in.

Lenders price that risk. Knowing the real numbers before you shop changes which parcels are actually within reach.

What land loan terms typically look like

Terms vary a lot by lender, region, and how raw the land is, but the shape is consistent:

• Higher down payment. Commonly 20–50%. Raw, unimproved land sits at the higher end; a lot in a platted subdivision with utilities at the street sits at the lower end.
• Shorter terms. Often 5–20 years rather than 30, and some are structured with a balloon payment after a few years.
• Higher interest rates. Typically above prevailing mortgage rates.
• Stricter credit requirements. Land lending is discretionary for most banks, so they can be picky.

Run your budget on those assumptions, not on mortgage assumptions. A parcel that looks affordable at 5% down can be out of reach at 35%.

The more raw the land, the harder the loan

Lenders roughly sort land into tiers, and where your parcel falls drives everything:

• Improved lot — road access, utilities at the street, already platted. Easiest to finance.
• Unimproved lot — legal access but no utilities yet. Harder, more down.
• Raw land— no access, no utilities, possibly no survey. Hardest, and some lenders simply won't.

This is one more reason the basics matter before you fall in love with a parcel: a lot with no recorded legal access isn't just a permitting problem, it's often a financing dead end too.

Who actually lends on land

Large national banks and online mortgage lenders mostly don't. The realistic list is more local than people expect:

• Community banks and credit unions in the county where the land is. They know the local market and hold these loans on their own books. This is usually the best starting point.
• Farm Credit System institutions. They specialize in rural land and are often the most workable option for acreage.
• Seller financing. Common in rural land sales. Terms are negotiable and it can be a good fit — but insist on a title search and a properly recorded deed anyway. Owner financing does not make due diligence optional; if anything it raises the stakes.
• USDA and state programs in some areas, if you intend to build a primary residence.

Construction loans are a separate conversation

If your plan is to build, don't assume the land loan rolls into it. A construction loan is a different product with its own approval, and lenders will want to see that the parcel can actually be built on — permits, plans, a builder, and often a passing perc test if the lot is on septic. Some lenders will roll the land purchase into a construction-to-permanent loan, which is worth asking about early because it changes how much cash you need up front.

Call lenders before you shop, not after

Call two or three local banks in the target county and ask plainly: do you lend on vacant land here, what's your minimum down payment, and what would disqualify a parcel? Fifteen minutes of that tells you your real budget and rules out parcels you were never going to be able to finance — before you spend money on inspections or get emotionally committed.

A note if you have no credit history

Paying cash your whole life is admirable and also leaves you with no credit file, which lenders read as unknown risk rather than low risk. If financing is anywhere in your plan, start building a file well before you need it — that takes months, not days. If you're buying with cash outright, this doesn't apply, but do budget realistically for the build, which is where cash buyers most often come up short.