Financing land is a different game than financing a house. Lenders see raw land as higher risk, so the terms, down payments and options change — knowing them before you offer keeps you in a strong position.
Your main options
- Raw / unimproved land loan — for undeveloped parcels with no utilities. Highest risk to lenders, so expect the largest down payments and shorter terms.
- Lot / improved land loan — for parcels with utilities and access in place (e.g., a subdivision lot). Generally friendlier terms than raw land.
- Construction loan — funds the build in draws; often used when you'll build soon after buying.
- Construction-to-permanent loan — rolls the lot, construction and final mortgage into one closing, avoiding a second loan later.
- Seller financing — common on rural land; the seller carries the note. Terms are negotiable, which can help buyers who don't want a traditional land loan.
- Cash — strongest offer, and simplest on inexpensive rural parcels.
What lenders look at
Beyond your credit and income, land lenders weigh the parcel itself: is it buildable, does it have access and utilities (or a clear path to them), and how marketable is it if they had to foreclose. A parcel with solved water, legal access and clean zoning is easier to finance than a raw, landlocked one.
Frequently asked questions
Is it harder to get a loan for land than a house?
Generally yes. Lenders view raw land as higher risk than a finished home, so land loans often require larger down payments and shorter terms. Improved lots and construction-to-permanent loans have friendlier terms, and seller financing is common on rural parcels.
What is a construction-to-permanent loan?
It's a single loan that covers the lot purchase and construction, then converts to a permanent mortgage — all in one closing. It saves you from taking out a separate mortgage after building and is popular with buyers who'll build soon after purchasing.
Can I use seller financing to buy land?
Often, yes — especially on rural land, where sellers frequently carry the note. Terms (down payment, rate, length) are negotiable, which can help buyers who prefer not to use a traditional land loan. Always paper it properly through a title company or attorney.
Buying or selling land in Washington County?
Aurora Serrano is a St. George REALTOR® with Abundant Real Estate Group at Keller Williams — helping buyers find buildable lots, acreage, view parcels and off-grid ground across St. George, Ivins, Hurricane, Apple Valley, Enterprise and all of Southern Utah. She knows the questions that make or break a raw-land deal: water rights, culinary vs. secondary water, zoning, access, septic feasibility and utility reach. Bilingual (English & Spanish) and a licensed financial-planning perspective most agents can’t match.
Have a parcel in mind, or want a shortlist? Text Aurora directly:
Text Aurora · 435-256-5584 Search Southern Utah listings