Land Loans
Financing a parcel with no building on it. Lenders treat bare land as the riskiest thing they can secure against — nothing generates income, nothing can be rented, and if a project stalls there is only the dirt.
At a glance
- Purpose
- Business purpose
- Focus
- Entitlement status
- Exit
- Construction loan or sale
- Lender panel
- 20+
Scope: nationwide. Land lending here is business purpose and we broker it across the country. Owner-occupied home loans are available in California only.The question that decides your terms
The question that decides your terms
How close is this parcel to being built on?
Entitled land with permits in hand or imminent
is the strongest position. There is a clear route to a building, and often to a construction loan that takes out the land financing.
Entitled land without permits
sits in the middle. Zoning and approvals are settled; the project timeline is not.
Raw, unentitled land
is the hardest. Whether it can be built on at all is an open question, and no lender can answer it for you. Entitlement is a planning process, not a financing one.
The nearer a parcel is to a shovel, the better it finances. That is the whole logic of this product.
Who this fits
You are buying a parcel and building on it soon
You have found a site and need to secure it while entitlements progress
You are holding land as a long-term position
You are buying an infill lot in an established area
You are acquiring adjacent land to expand a site you already own
Who this does not fit
You are relying on entitlements you do not have and cannot evidence. Financing does not resolve a planning question, and no lender solves it for you.
The parcel has access, utility or title problems. Landlocked parcels, absent utilities and easement disputes narrow the lender pool to almost nothing.
You want conventional terms. Land carries larger down payments, shorter terms and a higher cost than financing on a built property. That is the market, not one lender's view.
A remote parcel with no comparable sales. Valuation is the whole file on land, and where comparables are scarce the scrutiny rises and options thin out.
How qualification works
The parcel
The parcel first: location, zoning, entitlement status, access, utilities, topography, and whether comparable land sales exist to support a value.
Your plan, then you
Then your plan — build, hold, or sell on — and how the loan is repaid. A land loan is short and it has to exit somewhere, usually into a construction loan or a sale.
Then you: credit, and the liquidity to cover the down payment and carry a payment on an asset producing no income.
We are a brokered business and place the file from a panel of 20+ lenders. Land lenders are considerably fewer than lenders on built property, which is where placement earns its keep.
If you are building
One facility
Land can often be financed as part of the construction loan rather than separately, which avoids two closings and two sets of costs. Yes.
Close to permits
Where permits will issue within 60 days, the construction process can begin — though closing waits for issuance. If you are close to that point, start at Ground-Up Construction rather than here.
Frequently Asked Questions
Why is land harder to finance than a house?
It produces no income, cannot be rented, and if a borrower walks away the lender is left with a parcel rather than a building. Terms reflect that.
Do I need a down payment?
A larger one than on built property. How much depends heavily on entitlement status.
Can I finance raw, unentitled land?
Sometimes, on tighter terms and from a much smaller pool of lenders. The less certain the route to a building, the harder it is.
What is entitlement?
The planning approvals that establish what can be built on a parcel — zoning, use permits, subdivision, environmental clearances. It is decided by the local authority, not by a lender.
Can the land loan roll into a construction loan?
Often the cleaner route is to finance the land within the construction loan from the outset. If you already own the parcel, its value usually counts toward your equity in the build.
Does it matter if there is no road access or no utilities?
Considerably. Access and utilities are among the first things a lender checks, and their absence narrows the options sharply.
Can I use it for land I will build my own home on?
Owner-occupied lending is California only, and the structure depends on how close the build is. Raise it at the scenario analysis.
How long are the terms?
Short. Land financing is a position to move on from, not to settle into.
Do you fund these yourselves?
No. We are a brokered business and place the file with the lender whose program fits it.
What happens next
The whole business-purpose family, if the parcel is one part of a larger plan.
You are here
Land Loans
Financing a parcel before you build.
Where speed matters or the parcel is unconventional.
Where the land loan usually exits
Ground-Up ConstructionWhere the land loan usually exits, and often the better place to start if you are building soon.
Request a Scenario Analysis
Send the parcel, its zoning and entitlement status, and what you intend to do with it. Entitlement status is what sets the terms, so start there.
Nothing on this page or website constitutes an offer of credit, a rate quote, or a commitment to lend. All loans are arranged through third-party lenders and are subject to full application, credit approval, income/asset verification, property appraisal, and underwriting. Terms and availability are subject to change without notice. Loankey.io is a licensed real estate broker; loans are arranged, not made. Investor and business-purpose lending nationwide. Owner-occupied home loans in California.