A land loan is a real estate loan secured by land that has not been improved with any buildings. These types of loans are far more difficult to obtain from financial institutions than either home loans or loans secured by existing income producing buildings. Land loans made by financial institutions, such as commercial banks or credit unions, are usually short-term loans of one to three years, made to borrowers who have a plan to develop the land by constructing a house, subdivision, or income producing property such as an apartment building or commercial property. These lenders will expect that the land has been surveyed and the zoning is acceptable.
Financial institutions do not consider land loans to be among their highest priorities because these loans have a higher-than-average level of risk. They are usually made only to existing clients of the financial institution who have excellent credit and a well-defined plan for the land's development. Some of these lenders also make construction and development loans. Many buyers of land seek seller financing, which is common in the development industry.
When utilizing the services of Pacific-Realtors.net to acquire land, we can often help the investor obtain acquisition financing, as well as construction loans-financing.