If you've called a bank about buying land up here and gotten a confusing non-answer, here's the explanation nobody gave you:
Vacant land is expressly ineligible for conventional mortgage financing. Fannie Mae's eligibility rules list vacant land and land development properties as ineligible outright, alongside agricultural properties like farms and ranches. It isn't a matter of your credit, your income or your down payment. A conventional mortgage cannot be used to buy raw land, full stop.
That single fact explains almost every frustrating conversation people have about buying land. The loan officer isn't being difficult — they genuinely don't have a product for you, because the product they sell doesn't exist for this.
So what does exist? Quite a lot, actually. It's just a different world with different rules.
What a land loan actually is
Land is financed through lot loans — and these are almost always portfolio products. That means the lender keeps the loan on its own books rather than selling it to Fannie or Freddie, so the lender writes its own rules.
Practically, that means three things you should expect:
More money down than a house. Considerably more, and it scales with how undeveloped the parcel is.
Shorter terms. Land loans commonly run a few years rather than thirty, and often carry a balloon at the end. This is not a loan you sit on for decades — it's a bridge to building.
Wide variation between lenders. Because there's no agency standard, one local bank's terms can look nothing like another's. This is exactly where shopping matters, and exactly where a single-bank loan officer runs out of road.
Not all land is the same to a lender
Lenders sort parcels roughly into three buckets, and where yours falls drives everything:
Improved lot. Utilities at or near the property line, recorded boundaries, legal year-round access, often in a subdivision. This is the easiest to finance and requires the least down.
Unimproved land. Legal access exists but utilities don't, or not all of them. More down, more scrutiny.
Raw land. No utilities, no improvements, sometimes questionable access. This is the hardest, requires the most down, and some lenders simply won't.
I'm deliberately not publishing down payment percentages here, because they genuinely vary lender to lender on portfolio products and any number I gave you would be wrong for somebody. What I'll do instead is tell you which bucket a specific parcel falls in and what the lenders I work with are actually requiring for it right now.
The part most people don't know: your land can be the down payment
This is the single most valuable thing on this page, and it applies to a lot of people up here.
If you already own a lot — bought it years ago, always meant to build — the equity in that land can typically count toward your down payment or equity contribution on a construction loan. You may not need to bring much cash at all.
The vehicle is a one-time-close construction-to-permanent loan: one loan, one closing, one set of closing costs. It funds the build in draws as work progresses, then converts to permanent financing when the home is done — rather than closing twice and paying for the privilege twice.
Not many lenders offer these, and the ones that do differ a lot on what they require from your builder, your plans and your timeline. I've written more about how one-time-close construction financing works, and the lot loan side is covered here.
If you've been sitting on a parcel in Linden or Clay Springs or out past Snowflake thinking you need to save a pile of cash before you can build — you may be closer than you think. That's a ten-minute conversation worth having.
What the appraiser needs to see
Once you're building, the property has to satisfy the appraisal, and rural parcels raise questions suburban ones don't.
Water and septic. If public water and sewer aren't available, the property needs a private or community well and septic that's genuinely available and used by the property. Fannie requires private well or septic facilities to be located on the subject site — unless the property has a right to access off-site facilities under an adequate, legally binding agreement for access and maintenance. Government loan programs layer on their own water testing and separation requirements.
Shared wells are common on White Mountains acreage and they are a real underwriting item. A recorded, enforceable agreement is generally required, and government programs have their own additional standards. An expired or missing well-share agreement isn't just a water problem — it's a loan eligibility problem.
Access. Properties must be readily accessible by roads meeting local standards, and a property lacking adequate access is ineligible. A private dirt road can be perfectly fine. An undocumented arrangement where everyone has always driven across a neighbor's parcel is where deals stall. Sort access documentation out early — it's a title and survey question, not a lending one, and it takes time.
Acreage isn't the problem people assume. Fannie has no maximum acreage guideline. The test is whether the appraiser can show, through comparable sales, that the property is typical for the area. Where large parcels are normal — and up here they are — acreage alone doesn't disqualify anything. What can cause trouble is excess land: land not needed to support the home that could be sold separately. That's an appraisal determination, and it's worth knowing it exists before you buy 40 acres intending to finance a house on 2 of them.
Off-grid, and the leased-solar trap
Off-grid properties are financeable more often than people expect, but the gate is usually the appraisal, not the guideline. Conventional rules expect utilities meeting community standards, and the appraiser has to support value with comparable sales of similarly powered homes nearby. Where those comps exist, you have options. Where they don't, you're generally looking at portfolio lending or cash.
And here's a specific trap almost nobody writes about: leased solar systems and power purchase agreements. The solar company often holds a recorded interest against the property, and that can conflict with the lender's requirement for first lien position. It has to be subordinated or paid off before closing. That's a real, common, fixable problem — but only if it's found early, because getting a solar company to execute a subordination on your timeline is not a same-week affair.
If a property you're considering has leased solar, tell me at the start. It's the kind of thing that surfaces three days before closing otherwise.
What I'd check before you buy a parcel
Before you write an offer on land, get answers to these. Most are free and all of them are easier now than later.
Is there legal, recorded, year-round access — not just a road that exists? What utilities are at the line, and what would it cost to bring in what isn't? Is there a well, and if it's shared, is there a recorded agreement that's still in force? Has septic feasibility been established, or would you be finding out after you own it? What's the zoning, and does it permit what you intend to build? And if you're planning to build eventually, who are the lenders that will finance construction there — because that answer differs by parcel.
That last one is the question a land seller can't answer and a listing agent usually can't either. It's the one I can.
Why this needs both licenses
Buying land is the clearest case I know where the property question and the money question are the same question. Whether a parcel is a good buy depends substantially on whether anyone will lend on it — now or when you want to build.
Most agents can walk you the boundaries. Most loan officers can tell you their bank doesn't do land loans. Being both means I can look at a specific parcel and tell you what it will take to finance it, whether your existing land equity gets you there, and which of the lenders I work with actually writes these.
As an independent broker I shop 100+ lenders rather than selling one company's product — and on land and construction, where every lender writes its own rules, that difference is the whole thing.
Send me the parcel number or the address and tell me what you want to build. I'll tell you honestly what's financeable and what isn't.