Understand raw land vs finished lots, down payments, timelines, and how construction‑to‑perm can take your project from dirt to done.
Published: November 2025
Land first, home next? Smart. The right loan strategy helps you secure the lot and plan a smooth path to construction.
Types Of Land Financing
• Raw Land — No utilities/roads; the highest down payment and more substantial reserves.
• Unimproved — Some access/utilities nearby; mid‑range requirements.
• Improved / Finished Lot — Roads/utilities in; often the best terms.
Construction‑To‑Perm (C2P)
• One Closing: Finance the build and then convert to a permanent mortgage.
• Draws: Funds are released in stages as the project hits milestones.
• Rate/Term: Options vary; compare ARM vs fixed, and interest‑only during build.
What To Check Before You Buy
• Zoning & Setbacks — Confirm allowable use and building envelope.
• Utilities — Power, water, sewer/septic, gas, internet—what’s onsite vs offsite?
• Soils & Topography — Geotech, flood, fire, access, slope.
• Permits & Fees — Timing and impact fees by jurisdiction.
Budget & Contingency
• Hard Costs — Foundation, structure, MEP, finishes.
• Soft Costs — Design, permits, fees, surveys, reports.
• Contingency — 10–15% cushion for changes and surprises.
6‑Step Game Plan
1) Feasibility — Engage designer/GC for a quick site read.
2) Budget — Align design to budget early to avoid redraws.
3) Financing — Lot loan vs C2P; compare down payment and timeline.
4) Team — Architect, engineer, GC, and lender who’ve done this locally.
5) Approvals — Submit plans; track critical‑path tasks (utilities/permits).
6) Build — Manage draws, inspections, and change orders proactively.
FAQs
Q: Can I buy land now and build it later?
A: Yes—lot loans can bridge to future construction; terms vary by timeline and location.
Q: How much down will I need?
A: Land loans typically require higher down payments than home purchases; we’ll outline options by land type.
Q: Can modular or manufactured homes go on my land?
A: Often, if allowed by zoning/CC&Rs and foundation standards, verify before closing.
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Plotting your land‑to‑home path? Apply with New Wide Lending at /apply.
Compliance: Program availability and terms subject to lender approval.
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Disclaimer:
Subject to credit approval. Not a guarantee to lend. Programs, rates, and terms may change without notice. Licensed in CA, TX, FL & GA. CalDRE #01928649 • NMLS #1339357. Equal Housing Lender.