Twenty-eight guides on borrowing money to buy land, one question each. What a land loan is and why lenders treat bare ground differently from a house, how to choose between a bank, a credit union, the seller and USDA, what a subdivision lot needs compared with forty acres of pasture, and the closing costs that appear after you have already fallen for the parcel.
Start with the guide that matches the decision in front of you rather than reading from the top. Most buyers have one of these open at a time.
Below the post list you will find the published numbers this topic usually skips: what land costs per acre from USDA, what agricultural banks actually charge on land, what the Farm Service Agency lends at, and five widely repeated figures that no agency publishes at all.Land Loan
Land Loan
Everyone quotes numbers for land loans. Almost nobody cites one.
Search for land financing and you get the same four figures on every page: land loans run 1 to 3 percent above a mortgage, expect 20 to 50 percent down, terms are 5 to 20 years, and you need a 700 credit score. Those numbers get repeated so consistently they read as settled. Try to trace one to a government agency, a Federal Reserve survey or a regulator and there is nothing underneath.
These 28 guides cover the mechanics: what a land loan is, why lenders treat dirt differently from houses, which loan type fits a rural parcel versus a subdivision lot, and what the closing costs nobody warned you about actually are. Below the list is the part that is usually missing, which is the published data. What land costs per acre, what farm land lenders actually charge, and what the federal government lends at, all sourced and dated.
If you want a payment estimate for a specific parcel and rate, the land loan calculator does that. This page is for the numbers you should have before you type anything into it.
Land values, from the only agency that measures them nationally
The US Department of Agriculture surveys farm real estate every year and publishes a per-acre value for every state. The 2026 summary came out on 31 July. It is the only national land price series produced by a statistical agency, and it is the right starting point for anyone about to borrow against acreage.
| State | 2025 | 2026 | Change |
|---|---|---|---|
| Rhode Island | $22,500 | $23,600 | The highest value of any state |
| New Jersey | $16,600 | $17,000 | Development pressure, not farm income |
| Massachusetts | $14,900 | $15,200 | Small parcels, dense population |
| Connecticut | $13,400 | $14,600 | Up 9 percent in one year |
| California | $13,700 | $14,100 | Irrigation and permanent crops |
| Iowa | $9,790 | $10,100 | The benchmark corn belt number |
| Nebraska | $3,820 | $4,400 | Up 15 percent, the sharpest move here |
| Kansas | $2,750 | $3,200 | Below the national average |
Read this correctly. USDA measures farm real estate. A quarter-acre residential building lot in a subdivision is a different market with a different price, and no federal agency publishes a national average for it. Use these figures for acreage, pasture, cropland and rural parcels, and treat a lot in a platted subdivision as a local comparable question instead. How to Finance a Lot Purchase in a Subdivision covers that side.
Three published land lending rates, and a mortgage to measure them against
Nobody publishes an average interest rate for a consumer buying a vacant residential lot. Two institutions do publish rates for lending secured by land, and both are real surveys of real lenders rather than an estimate. Set against the mortgage benchmark from the same month, the picture is not the one the internet describes.
| Rate | Level | What it covers | Source and date |
|---|---|---|---|
| Farm real estate loan | 6.79% | Average charged by agricultural banks on loans secured by farm real estate | Chicago Fed AgLetter, second quarter 2026 |
| Farm operating loan | 7.12% | Same survey, short term operating credit rather than land | Chicago Fed AgLetter, second quarter 2026 |
| FSA Direct Farm Ownership | 6.00% | The federal government's own direct loan to buy farm land | USDA FSA, effective 1 August 2026 |
| 30 year fixed mortgage | 6.67% | Benchmark for comparison, conventional home purchase | Freddie Mac survey, week ending 13 August 2026 |
The gap between a bank farm real estate loan and a 30 year mortgage in August 2026 is about 12 basis points, roughly a tenth of a percentage point. The federal government's direct land loan is 67 basis points cheaper than the mortgage. Neither of those looks anything like the 1 to 3 percent premium that gets quoted everywhere, including in plenty of lender marketing.
Be careful with the comparison in both directions. The Chicago Fed survey covers agricultural banks in the Seventh District lending on farm ground, to borrowers with farm income and an existing banking relationship. That is a better borrower profile than a first-time buyer financing five wooded acres through a community bank, and the rate quoted to you may well be higher. The honest statement is not that land is cheap to finance. It is that nobody publishes the premium everybody quotes, and where published rates do exist they are much closer to mortgage rates than the folklore suggests. Land Loan Interest Rates Explained and Why Land Loans Are Harder to Get Than Home Loans work through what actually drives a quote.
Five numbers this whole category repeats that no agency publishes
We went looking for a primary source behind each of the standard land loan claims. USDA, the Farm Service Agency, the Federal Reserve banks, the FDIC, the Consumer Financial Protection Bureau and the Census Bureau were all checked. Here is what came back empty, and what is published instead.
- "Land loans run 1 to 3 percent above a mortgage." No agency publishes a land loan rate premium. The two published rates above sit 12 basis points apart, and the federal direct rate is below the mortgage rate.
- "Expect 20 to 50 percent down." No primary source publishes down payment norms for land. The only official down payment figure that exists is the FSA Down Payment program, where the borrower puts in 5 percent and FSA finances up to 45 percent.
- "Land loan terms run 5 to 20 years." FSA Direct Farm Ownership runs up to 40 years. So does the guaranteed version. Even the farm ownership microloan runs 25 years.
- "You need a 680 to 720 credit score." Nothing at the CFPB or any federal source sets or reports a land loan credit threshold. Individual lenders set their own, which is a very different claim. What Credit Score Do You Need for a Land Loan? treats it that way.
- "Raw, unimproved and improved land are priced in three separate rate tiers." The categories are real and useful for understanding lender risk. The idea that each carries a defined rate band is lender marketing convention, not a published schedule. Raw Land vs. Improved Land explains the distinction without inventing the pricing.
We also could not source the claim that land loans default more often than home loans, which is the usual explanation for the pricing. Bank call report data groups land with builder and developer construction credit, a category that has little to do with a household buying acreage, so the comparison does not hold up. Where the reason for a rule is unknown, these guides say so rather than inventing one.
The government lends money to buy land, and hardly anyone brings it up
The Farm Service Agency makes direct loans, not just guarantees. If the parcel supports a farming operation, however small, these terms beat what a commercial bank will offer, and the agency publishes every rate and limit openly.
| Program | Rate | Maximum | Term |
|---|---|---|---|
| Farm Ownership, Direct | 6.000% | $600,000 | 40 years |
| Farm Ownership, Down Payment | 2.000% | $300,150 | 20 years |
| Farm Ownership, Joint Financing | 4.000% | $600,000 | 40 years |
| Farm Ownership Microloan | 6.000% | $50,000 | 25 years |
| Farm Ownership, Guaranteed | Set by the lender | $2,343,000 | 40 years |
| Operating, Direct | 5.250% | $400,000 | 7 years |
Two of those deserve a second look. Down Payment asks the buyer for 5 percent, lends up to 45 percent at 2 percent interest, and leaves a commercial lender to cover the rest, which turns an impossible cash requirement into a manageable one. Joint Financing covers up to half the purchase price at 4 percent alongside a bank. Both are aimed at beginning farmers and ranchers, and the definition of a farm is broader than most buyers assume.
If the land will not produce anything, these programs are closed to you and the conventional route applies. Financing Farm Land: USDA Loans and Other Options and USDA Land Loan vs. Conventional Land Loan cover eligibility properly, and Buying Rural Land: Financing Options That Work is the starting point for a parcel with no farm plan attached.
Two Federal Reserve districts, two different pictures
USDA measures once a year. The regional Federal Reserve banks survey agricultural lenders every quarter, which catches turns earlier, and in mid 2026 the two big farm districts disagree.
| Survey | Measure | Change |
|---|---|---|
| Chicago Fed, Seventh District | Farmland values, nominal | 0% |
| Chicago Fed, Seventh District | Farmland values, adjusted for inflation | -3.7% |
| Kansas City Fed, Tenth District | Nonirrigated cropland | +1% |
| Kansas City Fed, Tenth District | Irrigated cropland | +4% |
| Kansas City Fed, Tenth District | Ranchland | +7% |
Corn belt ground has stopped appreciating and is losing value in real terms. Grazing land in the plains is still climbing faster than anything else on this page. That split matters if you are buying for appreciation rather than use, which is the subject of Buying Land as an Investment: What the Numbers Actually Look Like. It also matters to a lender sizing an appraisal, because collateral that is flat in nominal terms and falling in real terms gets underwritten more conservatively than collateral that is rising.
All 28 land loan guides, grouped by the decision in front of you
The archive above runs newest first. These groups follow the order a purchase actually happens in. Every guide hands off to the land loan calculator when the question turns into arithmetic.
Start here: how land loans work
The mechanics, in the order a first-time buyer meets them. Read the first two before you talk to any lender.
- What Is a Land Loan? A Plain Guide for First-Time Buyers The product explained from zero, and how it differs from a mortgage.
- How Land Loans Work: Rates, Terms and Lender Types Who lends on land, what they ask for, and how a deal is structured.
- Why Land Loans Are Harder to Get Than Home Loans The collateral problem, explained from the lender's side of the desk.
- Raw Land vs. Improved Land: What's the Difference for Financing? Utilities, access and permits, and how each one changes the file.
- Land Loan Interest Rates Explained What actually moves a quote, and which parts you can influence.
- What Credit Score Do You Need for a Land Loan? Lender thresholds rather than a legal minimum, because there is no legal minimum.
- Land Loan Amortization: How Payments Break Down Over Time Where the money goes each month, and what a balloon does to the schedule.
Choosing how to pay for it
Eight head-to-head decisions. Most buyers face two or three of these, not all eight.
- Should You Pay Cash or Finance Land? A Real Decision Guide The opportunity cost argument, run properly rather than assumed.
- Land Loan vs. Seller Financing: Which Is Better? When the seller is the cheapest lender available, and when that is a trap.
- Land Loan vs. Home Equity Loan: Which Wins for Buying Land? Borrowing against a house you own to buy ground you do not.
- Land Loan vs. Construction Loan: Don't Mix Them Up Two products, two timelines, and the mistake that costs a closing.
- USDA Land Loan vs. Conventional Land Loan: Which Is Right for You? Eligibility first, then the rate difference, which is large.
- Fixed vs. Variable Rate Land Loans: What to Choose Short land terms change this calculation compared with a 30 year mortgage.
- Credit Union vs. Bank for a Land Loan: Where Should You Actually Apply? Who keeps land loans on their own books, and why that matters to you.
- Can You Use a Personal Loan to Buy Land? The Real Answer Possible, usually expensive, and occasionally the right call.
By what you are buying
The parcel decides the product. A subdivision lot and 40 acres of pasture are not the same transaction.
- Buying Rural Land: Financing Options That Work Access, wells, septic and the lenders who are comfortable with all three.
- Financing Farm Land: USDA Loans and Other Options The FSA programs in the table above, plus Farm Credit and commercial routes.
- How to Finance a Lot Purchase in a Subdivision Platted lots with utilities at the curb are the easiest land to finance.
- Buying Land to Build a Home: A Step-by-Step Financial Roadmap Sequencing the land purchase, the build and the permanent loan.
- Buying Land as an Investment: What the Numbers Actually Look Like Carrying costs against appreciation, with the arithmetic shown.
- Land Loans for Veterans: VA Benefits and What's Actually Covered What the VA benefit does and does not do for a bare lot.
Applying, negotiating and the real cost
The paperwork stage, plus the costs that appear after you are emotionally committed to the parcel.
- Land Loan Checklist: Everything You Need Before You Apply Documents, surveys and reports, gathered before the first conversation.
- How to Negotiate a Land Loan Rate and Terms Which terms move, which do not, and what to ask for instead of a rate cut.
- How to Buy Land with No Money Down (Realistic Options) The routes that genuinely exist, including the FSA down payment program.
- The Hidden Costs of Buying Land Nobody Tells You About Perc tests, surveys, road access, utility runs and annual property tax.
- 8 Land Loan Mistakes That Cost Buyers Thousands The expensive ones, ranked by how often they actually happen.
After you close
Two guides for land you already own and a plan that has moved on.
- Land Loan to Construction Loan: How to Convert One Into the Other Rolling the lot into the build without paying two sets of closing costs.
- How to Refinance a Land Loan When a balloon is approaching, and what improvements do to your options.
Land loan questions, answered from published sources
What is the average interest rate on a land loan?
No agency publishes one for consumer land purchases. The closest published figure is the Chicago Fed survey of agricultural banks, which put farm real estate loans at 6.79 percent in the second quarter of 2026, against a 6.67 percent 30 year mortgage in August.
Is it true that land loans cost 1 to 3 percent more than a mortgage?
That claim has no primary source behind it. The published farm real estate loan rate sits about 12 basis points above the 30 year mortgage, and the USDA Farm Service Agency direct land loan is 6.00 percent, which is below the mortgage rate.
How much land can I buy per acre in the United States?
USDA put farm real estate at $4,500 an acre in 2026, cropland at $6,020 and pasture at $2,000. State figures range from $23,600 in Rhode Island down to a fraction of the national average across the mountain west.
Does the government lend money to buy land?
Yes. The Farm Service Agency makes direct farm ownership loans up to $600,000 over 40 years, at 6.00 percent as of 1 August 2026, plus a down payment program at 2.00 percent where the buyer contributes 5 percent.
How much do I need to put down on land?
There is no published national norm. Individual lenders set their own requirement. The only official figure is the FSA down payment program, which requires 5 percent from the borrower and finances up to 45 percent.
Are farmland values still rising in 2026?
It depends on the region. USDA recorded a 3.4 percent national rise for 2026. The Chicago Fed found Seventh District farmland flat in nominal terms and down 3.7 percent after inflation, while Kansas City Fed ranchland rose more than 7 percent.
Every figure on this page, and where it came from
- Land values. USDA National Agricultural Statistics Service, Land Values 2026 Summary, released 31 July 2026. National and state per-acre figures.
- Federal loan programs. USDA Farm Service Agency, current FSA loan interest rates, effective 1 August 2026, and the farm ownership loan limits and terms.
- Agricultural lending rates. Federal Reserve Bank of Chicago, AgLetter, August 2026, covering the second quarter.
- Regional farmland values. Federal Reserve Bank of Kansas City, Ag Credit Survey, second quarter 2026, published 14 August 2026.
- Mortgage benchmark. Freddie Mac Primary Mortgage Market Survey via FRED, week ending 13 August 2026.
Where to go next
Run a payment for a specific parcel with the land loan calculator. If the purchase is part of a larger financing picture, the VA loan collection covers the veteran benefit in depth and the finance tools page lists every money calculator on the site. Everything else lives on the Waldev homepage.
Scope note. These guides explain published data and general lending practice. They are not mortgage or financial advice, and no lender is obliged to follow any figure on this page. Rates move weekly, USDA land values are annual and already dated by the time you read them, and program terms change. Confirm current numbers with the lender or agency before you commit to anything.