7 Best Banks for Land Loans in 2023

Do you want to purchase land to construct a house, you can consider getting a land loan. This financing can also be used to buy land for commercial use. Where you purchase land and how you want to utilize it will determine the type of loan you take out and how simple it is to qualify. This article will review the 7 best banks for land loans in 2023.


Banks for Land Loans

What is a Land Loan?

A land loan is financing used to pay for the acquisition of a piece of land. It’s also known as a lot loan. You’ll require a land loan to start from scratch and acquire land rather than an existing home. You can use this kind of loan to pay for the acquisition of a large plot of land, whether it will be utilized for residential or commercial purposes.


How do Land Loans work?

A land loan functions generally in the same way as a regular mortgage. If you grant this loan, your lender will give you money to purchase the plot of land you choose. The following years or decades will be spent repaying them together with interest.

However, because land loans are riskier for lenders than conventional mortgages, qualifying for one may take more work. As a result, borrowers need to demonstrate that they have an excellent credit score (700 or above) and justify why they need the land. Additionally, borrowers may draw attention to property features that should be investigated, such as zoning, land use limitations, surveyed boundaries, and utility access. These elements will help lenders assess the potential risk of the loan.

How Hard Is It to Get Approved for a Land Loan?

Because purchasing land is more complicated than purchasing a home, acquiring a land loan is more challenging than obtaining a conventional mortgage. You must be extremely clear about the land you plan to buy and be ready to submit surveys and zoning information about the site you wish to construct, as many banks and credit unions need to grant land loans readily.


A land loan can be more difficult to obtain than a conventional mortgage. You’ll need to provide evidence of improved credit and make a larger down payment to qualify. Finding loans might be challenging. You should look around longer to locate a solid alternative since not all lenders provide land loans.

Best Banks for Land Loans

  1. Old National Bank

One of the best banks for land loans is Old National. A 20% down payment is needed for lot loans, available for lots up to 5 acres in size. For lots between 5 and 25 acres in size, a down payment of at least 35% of the purchase price is required. Old National Bank offers loans for both improved and unimproved land, and you are not required to start construction right once.

Recently, First Midwest Bank merged with Old National Bank. Only Indiana, Minnesota, Wisconsin, Michigan, and Kentucky citizens may use these financing arrangements. Each loan will have a different interest rate and repayment schedule. You can also complete your application online and use the bank’s online loan calculator.


  1. WaFd Bank.

One of the best banks for land loans is WaFd Bank because it provides funding for land loans up to $700,000 with no requirement to begin development immediately. Your loan has minimal down payment requirements and particular interest rates, which will be based on your credit eligibility. However, the rates are normally lower the shorter the repayment time.

Arizona, Idaho, New Mexico, Nevada, Oregon, Texas, Utah, and Washington are among the states where WaFd Bank offers land loans. Use their online calculator to find out how much you are eligible for. You may then apply online or at a branch close to you.

  1. Atlantic Union Bank.

Check out Atlantic Union Bank for one of the best banks for land loans if you wish to invest in residential lots and undeveloped land. You must phone or visit a branch to discuss your financing alternatives with this specific institution. Although there are no calculators, rules for interest rates, or details about down payments on their website, Atlantic Union Bank also provides separate construction loans.

  1. Clear Mountain Bank.

Clear Mountain Bank only offers financing for up to 90% of the purchase price in West Virginia and Maryland. You may find out more about their loan application on their website, over the phone, or in person at a nearby branch. Both unimproved lands for recreational uses and residential lots for future development are eligible for loans from Clear Mountain Bank.


  1. Alpine Bank.

One of the best banks for land loans is Alpine Bank, which is based in Colorado and provides loans for both new buildings and lots. On developed land, the maximum loan-to-value is 75%. You can also look for further lending information and specifics on monthly payments online. Contact Alpine Bank right away by email, chat, or branch visitation.

  1. California Bank & Trust.

California Bank & Trust is one of the best banks for land loans that accept applications for land loans via phone, online, or in person. Candidates will have the choice of obtaining a single loan to pay for both the land acquisition and additional construction. Looking for a different lender can save you time and money. California Bank & Trust provides a variety of credit alternatives, financing up to 60% of the lot purchase price for both land and construction loans.

  1. Banner Bank.

You can borrow up to 75% of the purchase price with Banner Bank, which is accessible to people who live in Idaho, Washington, Oregon, and California. With competitive borrowing rates and costs, Banner will finance improved and unimproved lots. Additionally, since all loans are approved internally, there is no need to worry about a third-party service. Additionally, you can obtain financing for personal loans and building loans.

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Should You Take a Land Loan?

Depending on the land, its location, and your plans for using it, owning land may be a wise investment. For instance, a piece of land that is ready to be developed for a primary or secondary residence carries a lower risk than one that is undeveloped and meant for farming.

  • Government programs like USDA loans may offer land buyers cheap interest rates and very little or no money down.
  • Land loans can be helpful for small enterprises tied to the land.
  • In some area codes, buying a new house may be more expensive than buying a ready-to-build lot.


It is considerably more difficult to finance a piece of land to construct your dream home than to apply for a mortgage. You must verify the zoning, land use limitations, and access to utilities and public highways. Lenders need surveyed boundaries. Your down payment and loan fees will be cheaper as the land improves. Seller financing, local lenders, or a home equity loan are the best ways to pay for land acquisition. It is important to determine if you are eligible for a USDA-subsidized loan if you purchase a rural property.



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