How do you get a land loan?
The first step in securing a land loan is to determine your budget. You can estimate your land loan payments using our calculator to ensure your debt-to-income ratio supports the financing. Land loan options include conventional bank loans, land contracts, and government-backed loans such as USDA or FHA loans.
- Conventional bank loans are offered by traditional financial institutions and typically require a large down payment and good credit.
- Owner financing involves the land seller providing financing directly to the buyer, often offering more flexible terms than a bank loan.
- Government-backed loans, like USDA or FHA loans, are available through federal or state programs to help buyers purchase land in rural or low-income areas. When applying for a land loan, it’s essential to have a clear plan for the land and demonstrate its potential value, such as having a specific purpose for the property.