How do land loans work in Texas?

• Land without a house is more risk for a lender. Expect more paperwork and usually a bigger down payment than on a finished home. Your lender confirms what applies to you.
• Lenders sort land into types. A lot with road frontage, power and water is a different loan from raw acreage with no utilities.
• Your plan changes the loan. Building soon, holding the land, or using it for your business are different conversations.
• Several kinds of lenders do this. Local banks and credit unions, lenders that focus on rural land, sometimes seller financing, and a state program for eligible Texas veterans.
• Lender first, land second. Know what kind of land you can finance before you fall for a specific piece.

When you buy a house, the bank lends against the house. If something goes wrong, there is a home to sell. Vacant land is harder to resell, and its value depends on things you cannot see from the road: whether there is legal access, whether utilities reach it, whether part of it floods, what deed restrictions say.

So the lender asks more questions, and the terms on a land loan, such as the down payment, the length of the loan and the rate, tend to differ from a home mortgage. No single figure applies to everyone. The lender gives you yours once they see your documents.

1. Improved land. Road access, electricity, and city or water-company water and sewer. The simplest to finance.
2. Partially improved land. A road and maybe power nearby, but water would come from a well and wastewater would go to a septic system. The lender wants to know those can actually be installed.
3. Raw land. No utilities, and sometimes no clear access. The hardest to finance; often bought with more cash or with seller financing.

Here's what that means for you: before you tour acreage, find out which of the three your lender will finance. That alone can save weeks.

1. Talk to a lender that makes land loans. Not all of them do. If you are self-employed, find one who knows how to read business income. Do not change how you earn or how you file without talking to me first.
2. Decide your plan for the land. Build now, build later, keep animals, run part of your business there. The lender will ask, and the answer shapes the loan.
3. Search with that filter. A lot of acreage sits outside city limits, where the county sets the rules. That is where access, utilities and deed restrictions get checked.
4. Write your offer with time to investigate. A Texas land contract has its own steps: a survey, a title review and a period to do your homework. That time gets negotiated in the offer.
5. Confirm legal access. A dirt road you can drive on is not always a road you have a right to use. The survey and the title company check it. If access is through an easement (a recorded right to cross someone else's land), it needs to be in writing.
6. Check water, wastewater and flooding. If you will need a septic system, the permit comes from TCEQ or its authorized agent in that county, and not every lot passes the soil evaluation. For flooding, the official FEMA map shows whether part of the land sits in a mapped flood zone.
7. Appraisal and closing. The appraiser compares your land with similar land that sold nearby. The title company closes and records the deed with the county.

Here's what happens next: if you want these steps lined up for your situation, let's talk for 30 minutes before you start touring land.

• Your income documents. For a business owner, that usually means tax returns and business statements; the lender tells you exactly which ones.
• Your plan for the land, in plain words, and a rough timeline if you intend to build.
• Information about the property: the survey, the legal description, access, and what utilities are available.
• Proof of funds for the down payment and closing costs.

Every lender has its own list. Ask for it in writing at the first conversation so nothing surprises you later.

Texas has a land loan program through the Veterans Land Board, part of the state's General Land Office. It is for veterans and military members who meet the program's requirements, and the land must be in Texas and have legal access to a public road, among other conditions. Loan limits and terms change; the General Land Office confirms current terms on its official site.

• Picking the land before the loan. You fall for raw acreage, then learn your lender does not finance raw acreage. Lender first.
• Assuming a road means access. A handshake with the neighbor isn't enough. If access is not recorded, the lender and the title company will catch it.
• Assuming septic will work. Soil and lot size decide. Ask the county's authorized agent before you commit.
• Skipping the flood map. Part of the land in a mapped flood zone can change where you build and what insurance costs.
• Signing seller financing you have not read. It can be a good option, and every contract is different. Nobody signs what they do not understand; the title company closes and records it properly.

Picture a surgeon in Denton County who wants a few acres to keep horses now and build a home later. Step one was a lender who makes land loans and understands how they are paid. The lender spelled out which kinds of land they would finance and what documents they needed.

From there, the search had a filter: land with recorded access and power close by. On the favorite piece, they checked the FEMA map, ordered a survey and asked the county's authorized agent what a septic permit would take. This is an example, not a real client; every property and every loan is different.

On the moves Veronica Yeary guides in Dallas-Fort Worth, land gets checked the way a house does: with documents, before signing, not after.

• What kind of land your lender finances, and on what terms, in writing.
• Legal access: shown on the survey and the title commitment.
• Flood risk: the official FEMA map, by address or coordinates.
• Septic: TCEQ's authorized agent for that county.
• Restrictions and use: the deed, and the city planning office if the land is inside city limits.
• Your business income: read what to sort out when you own a business and why you should talk to the lender first.
• Water risk: how to read the flood map almost nobody checks.

This is not loan advice; your lender confirms your situation.

Is it harder to get a land loan than a home loan?

It usually asks more of you. With no house securing the loan, the lender looks harder at the land and your plan for it. There are options; your lender confirms which ones fit.

Does every bank make land loans?

No. Some banks do not lend on vacant land at all, and others only on certain types. Local banks, credit unions and lenders focused on rural land are common choices. That is why you talk to a lender before you search.

Can I buy land if I am self-employed?

Yes, there are options for business owners. The lender looks at how your income shows up on paper. Do not change how you earn or how you file without talking to me first.

What does legal access to land mean?

It is a written right to reach your land from a public road, either because the land fronts the road or through a recorded easement. The survey and the title company check it before closing.

Are there land loans for veterans in Texas?

Yes. The Texas Veterans Land Board offers land loans to veterans and military members who meet its requirements. The General Land Office confirms current limits and terms.

Before you fall for a piece of land, let's sort out your plan: what you want to do with it, what you can finance and what to check on every property. Thirty minutes, no commitment.

Let's talk for 30 minutes about your situation, not houses: veronicayeary.com/en/book

Call or text 469-441-8890 · veronica@veronicayeary.com