Purchase raw or improved land with flexible financing designed for vacant property. Secure your lot today and build on your timeline. Competitive rates from a federally chartered bank.
Secure your building site now with financing designed specifically for vacant land purchases.
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Buy Land Now, Build Later
Purchase your ideal lot or acreage today and build on your own timeline. When you're ready, refinance into a construction loan with your land equity as your down payment.
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Lock In Today's Land Prices
Secure your building site at current market prices before land values increase. Smart buyers purchase lots early in developing areas to capture future appreciation.
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Flexible Land Types
Finance residential lots, improved parcels, acreage, and rural land. We offer programs for subdivision lots, unimproved land, and larger parcels up to 20 acres.
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Terms Up to 20 Years
Land loan terms from 5 to 20 years give you the flexibility to choose a payment that fits your budget while you plan for future construction.
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Simple Qualification
No builder required, no construction plans needed. Qualify based on the land value, your down payment, credit, and income — simpler than a construction loan.
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Bank-Direct Pricing
Competitive land loan rates from a federally chartered bank. No broker markup — you're borrowing directly from the source.
Eligibility
Who Qualifies for a Land Loan?
Land loans have specific requirements for both the borrower and the property being purchased.
Land & Property Requirements
Land Type
Residential building lots and subdivision parcels
Improved or unimproved/raw land
Acreage for future home construction (up to 20 acres)
Due Diligence
Professional land survey typically required
Zoning must permit intended use (residential, etc.)
Clear title with no outstanding liens or disputes
Access & Utilities
Legal road access to the parcel
Improved lots: existing or nearby utility connections
Raw land: perc test may be required for septic feasibility
Improved vs. Raw Land
Improved lots with road access, utilities, and grading qualify for better rates and lower down payments. Raw land with no improvements requires larger down payments (often 35–50%) and may carry higher rates.
Borrower Requirements
Credit Score
680+ for most land loan programs
Some programs available at 640 with compensating factors
Higher scores qualify for better rates and terms
Down Payment
20–25% for improved lots in subdivisions
30–50% for raw or unimproved land
Larger down payments may reduce interest rate
Income & Employment
Stable, documented income with 2-year history
DTI ratio generally under 43%
6–12 months of reserves recommended
Intended Use
Future primary residence construction (best terms)
Second home lot (some programs available)
Investment or recreational land (higher requirements)
Land Types
Types of Land You Can Finance
Land loans are available for different property types, each with its own requirements and terms. Understanding the differences helps you choose the right financing for your purchase.
Improved Lots: Subdivision parcels with road access, utilities, grading — best rates and lowest down payments (20–25%)
Unimproved Land: Some infrastructure but not fully developed — moderate down payments (25–35%)
Raw Land: No improvements, no utilities, no road access — highest down payments (35–50%) and rates
Acreage: Larger rural parcels for future home building — terms depend on size and improvements
Residential Lots: City or suburban lots zoned for single-family homes — typically best terms available
Financing a platted lot in a subdivision with existing roads, water, sewer, and electric at the property line:
Purchase Price: $120,000 Down Payment (20%): $24,000 Loan Amount: $96,000 Rate: 7.50% Term: 15 years Monthly Payment: ~$889/mo (P&I)
Build when you're ready. Purchase the lot now and refinance into a construction-to-permanent loan when you're ready to build. Your land equity counts as your construction loan down payment.
Land to Home
From Land Purchase to Dream Home
A land loan is often the first step in building your custom home. Texana Bank can structure your land purchase with a clear path to construction financing when you're ready to build.
Purchase land now with a standalone land loan
Take time to finalize home plans and choose a builder
When ready, refinance into a construction-to-permanent loan
Land equity counts toward your construction down payment
One lender relationship from land purchase through move-in
• Year 1: Purchase land with 20–50% down
• Years 1–3: Pay down balance, plan your home, select a builder
• When Ready: Refinance into construction-to-permanent loan
• Build Phase: Interest-only during construction
Already have building plans? Ask about our construction loan that can include the land purchase and construction in a single financing package.
Costs & Fees
Understanding Land Loan Costs
Here's what to expect in terms of costs when financing a land purchase.
Cost
Typical Range
Notes
Down Payment
20 – 50%
Varies by land type: improved (20–25%), raw (35–50%)
Origination Fee
0.5 – 1.0%
One-time fee on loan amount
Land Appraisal
$400 – $800
Determines current market value of the land
Land Survey
$500 – $2,000+
Confirms boundaries, acreage, easements
Title Search & Insurance
$500 – $1,500
Ensures clear title with no liens
Recording Fees
$50 – $250
County recording of deed and mortgage
Environmental Assessment
$300 – $3,000
May be required for larger or commercial parcels
Perc Test (if needed)
$500 – $1,500
Soil testing for septic feasibility on rural land
Total Closing Costs
Land loan closing costs typically total 2–5% of the purchase price. For a $120,000 improved lot, expect approximately $2,400–$6,000 in closing costs. Raw land parcels may have higher costs due to surveys, environmental assessments, and perc tests.
Note: Actual costs vary by location, parcel size, and loan program. Your loan officer will provide a detailed Loan Estimate with all costs before closing.
Loan Comparison
Land Loan vs. Construction Loan
Buying land only versus financing the full build — here's how they compare.
Estimates only. Actual rates and payments will vary based on credit, income, land type, and loan program. Subject to credit approval.
The Process
Your Land Purchase Journey
From pre-qualification to closing on your land, here's what to expect at every step.
1
Pre-Qualification & Land Search
1–2 Weeks
Get pre-qualified with Texana Bank using a soft credit check. Know your budget, then find your ideal lot or acreage. Check zoning, access, utilities, and any restrictions before making an offer.
2
Due Diligence & Appraisal
2–4 Weeks
Once you have a signed purchase agreement, we order the land appraisal, title search, and survey. You complete any needed inspections — perc test, environmental assessment, and zoning verification.
3
Underwriting & Approval
1–2 Weeks
Our underwriting team reviews your financial documents, the land appraisal, title report, and survey. Once approved, we prepare your closing documents and schedule the closing date.
4
Closing & Ownership
1 Day
Sign your closing documents, the deed is recorded, and the land is yours. Begin planning your future home on your own timeline. When you're ready to build, Texana Bank can transition your land loan into construction financing.
Frequently Asked Questions
Land Loan FAQs
Answers to the most common questions about land loans, lot financing, raw vs. improved land, and the purchase process.
No. Texana Bank Mortgage uses a soft credit inquiry for pre-qualification, which has absolutely no impact on your credit score. You can check your eligibility, explore land loan options, and get pre-approved without any effect on your credit. A hard inquiry only occurs later if you formally move forward with a full application.
A land loan is a type of financing used to purchase a plot of land, whether raw, unimproved, or improved. Unlike a traditional mortgage for an existing home, land loans are specifically designed for buying vacant property. The land itself serves as collateral for the loan, and terms typically range from 5 to 20 years with higher down payments than conventional mortgages.
The terms are often used interchangeably, but a lot loan typically refers to financing a smaller, platted parcel in a developed subdivision with existing infrastructure (roads, water, sewer). A land loan generally refers to financing larger parcels or acreage that may or may not have improvements. Both are types of vacant land financing with similar qualification requirements.
Raw land has no improvements whatsoever — no road access, utilities, water, sewer, or grading. Improved land has at least some infrastructure in place, such as road access, utility connections, cleared grading, or well and septic systems. Improved land is easier and less expensive to finance because it carries less risk for the lender.
Land loans can finance residential building lots, acreage for a future home, rural land parcels, and in some cases recreational or investment land. The key factor is the intended use and the land's characteristics — improved lots in subdivisions are easiest to finance, while raw acreage in remote areas requires larger down payments and may have fewer lending options.
Most land loan programs require a minimum credit score of 680 or higher. Because land loans are considered higher risk than traditional mortgages, lenders typically require stronger credit profiles. Some programs may be available at 640 with compensating factors such as a larger down payment, significant reserves, or strong income documentation.
Down payment requirements for land loans typically range from 20% to 50% depending on the type of land. Improved lots in subdivisions may require 20–25% down, while raw or unimproved land typically requires 30–50% down. The higher down payments reflect the increased risk lenders take on vacant land compared to an existing home.
Land loan interest rates are typically 1–3% higher than conventional mortgage rates due to the increased risk of lending on vacant property. Improved lots generally receive better rates than raw land. Rates vary based on credit score, down payment amount, land type, and loan term. Contact Texana Bank for current land loan rates.
Land loan terms typically range from 5 to 20 years, which is shorter than a traditional 30-year mortgage. Some lenders offer terms up to 25 years for improved lots. Shorter terms mean higher monthly payments but less total interest paid over the life of the loan. Your loan officer can help you choose the right term for your budget.
Yes. Many borrowers purchase land with a land loan and build later when they are ready. When you are ready to build, you can refinance the land loan into a construction-to-permanent loan, which pays off the land balance and finances the construction in a single new loan. The equity in your land can count toward the down payment on the construction loan.
A land survey is typically required by the lender and is strongly recommended regardless. A survey confirms the exact boundaries, acreage, easements, and any encroachments on the property. It protects you from boundary disputes and ensures you know exactly what you are buying. Survey costs range from $500 to $2,000+ depending on the parcel size and complexity.
Before purchasing land, verify the zoning allows your intended use — residential, agricultural, recreational, or mixed use. Zoning determines what you can build, minimum lot sizes, setback requirements, and building height limits. Contact the local planning or zoning department to confirm the land's zoning classification and any restrictions before closing.
If the land is not connected to municipal water and sewer, you will need a well and septic system before building. Some lenders require a percolation (perc) test and soil analysis as part of the land loan approval process. These tests confirm the soil can support a septic system. Installing well and septic typically costs $15,000–$30,000 and can be financed as part of a future construction loan.
Yes. The land serves as the primary collateral for a land loan, similar to how a home secures a traditional mortgage. The lender will order an appraisal to determine the land's current market value. If you default on the loan, the lender can foreclose on the property. This is why lenders require significant down payments — to ensure adequate protection.
When you are ready to build, you refinance your land loan into a construction-to-permanent loan. The construction loan pays off the remaining land loan balance, and the equity you have built in the land counts toward your construction loan down payment. This is a common path — buy the land now, build later. Texana Bank can structure both the land loan and future construction financing.
Acreage limits vary by lender and loan program. Most residential land loan programs finance parcels from under an acre up to 10–20 acres. Larger parcels may require specialized agricultural or rural lending programs. Very large acreage (100+ acres) is typically financed through farm credit institutions or portfolio lenders with different terms and requirements.
Some lenders offer land loans for recreational purposes, but the terms are typically stricter — higher down payments (often 35–50%), shorter terms, and higher interest rates compared to residential building lots. The key is demonstrating the land has value and marketability. Land with road access, utilities nearby, or desirable recreational features is easier to finance.
Land loan closing costs typically include origination fee (0.5–1.0%), appraisal ($400–$800), title search and insurance ($500–$1,500), survey ($500–$2,000), recording fees, and attorney or escrow fees. Total closing costs generally range from 2–5% of the purchase price. Your loan officer will provide a detailed Loan Estimate before closing.
Yes, though terms for investment land are typically stricter than for land where you plan to build a personal residence. Expect higher down payments (30–50%), higher interest rates, and shorter terms for investment or speculative land purchases. Lenders want to see a clear plan for the property, whether it is future development, agricultural use, or eventual resale.
You will need standard financial documentation including two years of tax returns, recent pay stubs or income documentation, bank statements showing reserves and down payment funds, a copy of the purchase agreement, and information about the property including location, acreage, zoning, and intended use. A land survey and environmental assessment may also be required depending on the parcel.
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Ready to Secure Your Building Site?
From pre-qualification to closing, our land loan specialists guide you through every step of purchasing your future home site.
