Land Loans in Texas. Build Your Future on Your Terms.
Finance raw land, improved building lots, and agricultural property across Texas. Whether you are buying land to build now, build later, or simply hold as an investment, we have programs designed for Texas land.
A land loan finances the purchase of vacant land, improved lots, or agricultural property. Unlike a home mortgage where the structure serves as collateral, land loans are considered higher risk by lenders because vacant land is less liquid and more difficult to value and resell. As a result, land loans typically require larger down payments and carry slightly higher rates than traditional mortgages.
Texas has a strong land lending market with specialty lenders who understand the unique characteristics of Texas land, from suburban build-ready lots in Houston and DFW to large rural tracts and agricultural land. As an independent broker, Kris works with multiple Texas land lenders to find programs that fit your land type, intended use, and timeline for building.
Who Qualifies?
Credit score of 620 or higher (680+ preferred for best terms)
Down payment of 20-35% depending on land type and lender
Property is undeveloped land, improved lot, or agricultural land in Texas
Stable income and employment documentation
Ability to demonstrate purpose for the land (build timeline, agricultural use)
No existing mortgage delinquency or recent bankruptcy
Pros and Cons
Advantages
Finance land before you are ready to build
Lock in a property while planning your build
Agricultural and rural land eligible
Land equity can later serve as construction loan equity
Texas-specific lenders understand local land values
Things to Consider
Higher down payment required than home loans (20-35%)
Shorter loan terms typical (5-20 years vs 30 years)
Higher interest rates than improved property loans
Raw land loans most restrictive, improved lot loans more favorable
Limited lender options compared to home loans
Frequently Asked Questions
Land loans in Texas work similarly to traditional mortgages but typically require larger down payments (20-35%) and carry slightly higher rates. The loan term is often shorter (5-20 years). Lenders distinguish between raw land (no utilities, no access) and improved lots (utilities connected, road access, permits available), with improved lots receiving better terms.
A raw land loan finances completely unimproved land with no utilities, no road access, and no building permits. A lot loan finances an improved lot that has utilities, road access, and is ready to build on. Raw land loans are harder to obtain and require larger down payments. Lot loans are more commonly available and have better terms.
Yes. Land you own free and clear, or with significant equity, can often be used as the equity contribution toward a construction-to-permanent loan in Texas. Kris can structure a construction loan that converts to a 30-year mortgage upon completion using your land as the equity stake.
There is no universal acreage limit, but lenders evaluate the land based on its value, location, and intended use. Residential lot loans, rural land loans, and agricultural land loans each have different guidelines. Large acreage tracts may require specialty agricultural or rural lenders.
Texas has no state income tax, which benefits land owners. Property tax rates on vacant land vary by county. Agricultural land with an AG exemption in Texas carries significantly lower property taxes, which can make large rural tracts more affordable to hold. Kris can discuss how this affects your financing strategy.
