Written and reviewed by Jack Gladden, Senior Loan Officer, NMLS #1470164
Updated · 4-minute read · How these guides are written
On this page
Rural and acreage loans in brief
- Home with land
- A standard mortgage can cover a home on acreage when the land is typical for the area and the home is the main value.
- USDA
- 0% down for eligible buyers in eligible rural areas, with household income up to 115% of the area median.
- Large parcels and hobby farms
- Farm Credit and portfolio lenders finance more land, outbuildings and some income-producing use.
- Land only
- Lot and land loans, mostly from local banks and Farm Credit lenders, with larger down payments than a home loan.
- The property checks
- Comparable sales, legal road access, well and septic, and zoning.
- Where
- Homes and land in California, Arizona, Florida and Ohio.
Which loan fits?
USDA guaranteed
No down payment for a primary home in an eligible area. The site shouldn’t produce income, and generally can’t be big enough to subdivide under local zoning.
Best forModerate-income buyers outside cities
Conventional, FHA and VA
Standard mortgages for a home on acreage, appraised on the whole parcel. Working farms and ranches aren’t eligible.
Best forA country home where the house is the main value
Farm Credit and portfolio lenders
Lenders that keep loans in-house can finance large acreage, barns and shops, and some agricultural use.
Best forHobby farms and large parcels
Land and lot loans
Buy the land now and build later, or combine it with a construction loan.
Best forBare land or a future home site
Check a USDA address on the USDA loans page. To build on land, see construction and lot loans.
How lenders treat acreage.
- The whole parcel
- Fannie Mae has appraisers value the entire parcel; they can’t appraise 5 acres of an undivided 40.
- Typical for the area
- Land is easier to finance when nearby sales show similar acreage. A parcel much larger than its neighbors can push the land value above what a standard lender accepts.
- Not a farm
- Fannie Mae doesn’t buy loans on agricultural properties such as farms or ranches, or on vacant land. Barns and outbuildings are fine when the property is mainly a home.
- Zoning
- The home must be a legal use of the land; a legal non-conforming home can work if the appraisal reflects any effect on value.
Wells, septic, access and utilities.
- Water
- With no public water, the home must use a well or community system that meets local standards. Lenders often require a water test.
- Septic
- Private septic is acceptable when it meets local standards; many lenders and buyers order an inspection.
- Road access
- The home must be reachable by a road that meets local standards. On a private road, Fannie Mae requires a recorded maintenance agreement, unless state law already sets each owner’s share.
- Power and off-grid
- Utilities must meet community standards. Fully off-grid homes narrow the lender list.
Found a property with land?
Send me the listing and the acreage. I’ll tell you which lenders will finance it and what they’ll need checked.
Land and lot loans.
| Improved lot | Raw land | |
|---|---|---|
| What it has | Road access, utilities, often permits | No utilities, sometimes no road |
| Who lends | Local banks, credit unions, Farm Credit | Farm Credit, local banks, seller financing |
| Down payment | Lower, often around 20% | Higher, often well above 20% |
| Term | Shorter than a home loan, sometimes with a balloon | Shorter still, or fully amortized with Farm Credit |
USDA site loans go to nonprofit and public organizations that develop lots, not to individual buyers. Individuals usually buy land with a land loan, then build with a construction-to-permanent loan, which can roll the land in.
What to plan for.
- Longer appraisals. Rural appraisers travel farther and search wider for comparables, which can add time and cost.
- Inspections. Well, septic and sometimes a survey or perc test before closing.
- Insurance. Wildfire risk in parts of California and Arizona, and wind and flood in Florida, can affect cost and availability.
- Resale. Unusual parcels can take longer to sell, which lenders weigh in the appraisal.
How we get started.
Tell me about the property
Acreage, outbuildings, water, septic, access and how you’ll use it.
I match the lender
USDA, conventional, FHA, VA, Farm Credit or portfolio, based on the land.
Approval
Including an appraisal with suitable comparables and the property checks.
Close
Then build, expand or refinance later.
Rural and acreage loans, answered plainly.
How hard is it to get a USDA rural home loan?
Easier than many expect if the address is eligible, your household income is within the limit and your credit and debts qualify. There’s no down payment, but the home must be your main residence.
Can I get a USDA loan for just land?
Not as an individual buyer. USDA site loans go to nonprofit and public developers. A USDA construction-to-permanent loan can include the lot when you build.
How do you qualify for a rural loan?
It depends on the loan: USDA has income and area limits; conventional, FHA and VA follow their usual credit and income rules; Farm Credit and portfolio lenders set their own, often with more down.
How much land can a mortgage cover?
Standard mortgages don’t set a fixed acreage limit; the land must be typical for the area and the home the main value. Farm Credit and portfolio lenders finance larger parcels.
How much is the payment on a land loan?
It depends on the price, down payment, rate and term, and land loans usually have shorter terms and higher rates than home loans. Tell me the property and I’ll compare the options for you.
Can you get a land and home loan together?
Yes. Buy a home already on the land with one mortgage, or use a construction-to-permanent loan that covers the land and the build.
Can I finance a working farm?
A home mortgage isn’t designed for an income-producing farm. Agricultural lenders such as Farm Credit are the better fit, and I can point you to them.
Do I need a well and septic inspection?
Usually, yes. Lenders often require a water test, and a septic inspection is wise even when not required.
Can I get a mortgage on a barndominium?
Often, yes, when it is built and appraised as a home: a permanent foundation, a residential interior and finishes, and comparable sales the appraiser can use. That last point is the usual hurdle where barndominiums are rare. Construction-to-permanent and portfolio lenders tend to be more flexible than standard programs.
USDA
Manufactured homes
Construction & bridge
Jumbo