Tips on Financing Vacant Land
Brent Voss
Country Meadow at Sunrise with Yellow Flowers
Finding financing for vacant land for recreational purposes or to simply enjoy the great outdoors can be challenging, especially if you are not planning to build in the near future. When selecting a lender, it is best to look for one with experience in vacant land financing because there are special considerations to keep in mind.  

Below are some tips on financing vacant land:

Pick the Right Agent: Having a real estate agent with experience in vacant land sales and financing is important. There may be zoning or other special use stipulations attached to the land. The right realtor can help determine if there are unique needs or considerations to explore before purchase based on their research.

Down Payment Options and Terms:  Be sure to know how much cash will be needed for the down payment and closing costs for the purchase. It is helpful to investigate other down payment options, such as using other property owned outright for collateral, to lessen or eliminate the need for cash out of your pocket. The length and terms of the loan can also vary depending on the land usage, size and purchase price.

Building Criteria: Often times when purchasing vacant land, there are restrictions on when and what can be built as well as a specific timeframe. It is important to know the stipulations for building or if the land can remain vacant.

Recreation: Land used strictly for recreational purposes may have size restraints put upon by the lender, especially on parcels over 10 acres in size.

Title Work: Proper title investigation will uncover the chain of ownership for the property as well as any easements or other claims on the land. If these go unknown it could cause title problems in the future if the owner wants to sell a piece of land.  

Tour the Neighborhood: Take a drive or walk around the property to be sure the property is suitable for the purpose you have in mind. Take note of how other properties in the area are used and how that may affect your use of the land.

As lenders to rural America and farmers, GreenStone specializes in vacant land financing. Contact one of our 36 local branches and speak to one of our financial service officers to learn more about our financing options.

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