Investors searching vacant land loan, raw land financing, and land acquisition loan for investors are at the first step of a development funnel — acquiring dirt before vertical construction, lot split, or pad development begins. Land is the highest-risk collateral in real estate lending: no income, no structure, no depreciation. Lenders who fund land do so on sponsor strength, entitlement path, and exit clarity.
This page covers land acquisition and bridge-to-build financing — explicitly positioned as the entry point to Jaken Finance Group’s ground-up construction loans and build-to-rent financing programs. If the plan is to plat multiple lots, streets, and utilities, continue with subdivision development financing and the subdivision development guide.
Land financing vs. improved-property financing
| Factor | Improved property (SFR, multifamily) | Vacant / raw land |
|---|---|---|
| Collateral | Structure + land | Land only |
| Income | Rent or ARV | None until developed |
| Leverage | 75%–90% LTC (improved) | 50%–65% LTV (land) |
| Underwriting | ARV, rent, NOI | Exit strategy, entitlement, sponsor liquidity |
| Term | 6–24 months | 6–18 months bridge |
| Rate | 8.99%–13.5% | 8.99%–13.5% IO |
When land loans make sense
| Scenario | Land loan role |
|---|---|
| Ground-up SFR or duplex | Acquire lot → roll into construction loan |
| Build-to-rent community | Assemble parcels → BTR financing |
| Pad development (MHC, storage) | Land acquisition → horizontal improvement → vertical phase |
| Lot split / sell | Bridge carry until lots are entitled and sold |
| Infill in established neighborhood | Tear-down lot — demo + build in combined facility |
What lenders review on land files
- Survey and legal description — acreage, boundaries, easements
- Zoning — residential, commercial, agricultural; permitted uses
- Entitlement status — platted? subdivision approved? variances needed?
- Environmental — Phase I ESA; wetlands, flood zone, prior industrial use
- Utilities — public water/sewer at lot line vs. well/septic required
- Exit strategy — build plan with budget, or lot-sale comps
- Sponsor liquidity — carry, interest reserve, entitlement costs
- Purchase price vs. comp — land comps by the acre or by the lot
The bridge-to-build funnel
Land acquisition is step one in a three-phase capital stack:
Phase 1: Land acquisition (this page)
↓
Phase 2: Ground-up construction draws
↓ → /ground-up-construction-loans-no-experience/
Phase 3: Permanent debt or sell-out
↓ → DSCR refi or retail sale
↓ → /build-to-rent-financing-programs-for-developers-2026/Phase 1 — Land bridge: Acquire the lot at 50%–65% LTV. Interest-only carry for 6–18 months while entitlements finalize and construction plans are stamped.
Phase 2 — Construction: Roll into ground-up construction financing with vertical draw schedule — foundation, framing, MEP, CO. Same lender relationship, no re-underwriting from scratch.
Phase 3 — Exit: Sell to retail buyer, execute build-to-rent lease-up and DSCR refi, or sell finished lots after a recorded plat — see subdivision development financing.
For build-to-rent developers assembling multiple lots, see build-to-rent financing programs for developers.
Typical land loan terms
| Parameter | Range |
|---|---|
| Rate | 8.99%–13.5% IO |
| LTV | 50%–65% of as-is land value |
| Term | 6–18 months |
| Points | 1–3 at closing |
| Close speed | 10–14 business days |
| Recourse | Personal guaranty typical |
Higher leverage (up to 75% LTV) may be available when land is combined with a construction budget in a single ground-up facility — the structure is acquisition + vertical in one loan, not land-only.
Worked example: infill lot → ground-up SFR
| Step | Detail |
|---|---|
| Land purchase | 0.25-acre infill lot, zoned SF-3, $85,000 |
| Land bridge | 60% LTV = $51,000 loan; $34,000 sponsor equity |
| Entitlement | Demo permit for existing structure; 3 months |
| Construction | $285,000 vertical budget via ground-up loan |
| As-completed value | $395,000 (per comps) |
| Exit | Sell at $395K or DSCR refi at 75% LTV = $296K |
Sponsor equity at land: $34,000. Total project equity: land down payment + construction down payment + carry. One lender relationship from dirt to door.
Land due diligence checklist
- Title commitment — easements, liens, encroachments
- Survey — boundaries match legal description
- Zoning letter — permitted use confirmed with municipality
- Utility will-serve — water, sewer, electric, gas availability
- Flood zone — FEMA map panel; elevation certificate if in SFHA
- Environmental — Phase I; Phase II if recommended
- Comp analysis — land comps and finished-product comps
- Budget — soft costs (entitlement, engineering) + hard costs (vertical)
Risks
- Entitlement delay — zoning variance or subdivision denial kills the timeline
- Environmental remediation — prior use contamination is expensive
- No income during carry — sponsor must fund interest from liquidity
- Market softening — finished-product comps may decline during 12–18 month build
- Utility extension — off-grid lots require capital-intensive infrastructure
Next steps in the funnel
- Ready to build? → Ground-up construction loans no experience
- Building a rental community? → Build-to-rent financing programs
- Need commercial land for storage or MHC? → Self-storage financing · MHC financing
Pre-Qualify Today · Ground-up construction · Build-to-rent · (833) 264-7776
Raw land LTV — improved vs. unimproved
| Land type | Typical LTV | Rate band |
|---|---|---|
| Infill with utilities at lot line | 50%–65% | 8.99%–13.5% IO |
| Agricultural / no utilities | 35%–50% | 8.99%–13.5% IO |
| Land + approved plans | 55%–70% | Bridge to vertical |
Exit must be defined — vertical construction, lot split sale, or refi after build. Ground-up construction · new construction hub · USDA not for investors.
Rates, terms and conditions offered only to qualified borrowers and are subject to change at any time without notice. Jaken Finance Group only finances non-owner occupied investment properties and select commercial development files.