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How Do Land Loans Work in Florida?

If you're looking to purchase vacant land in Florida, you'll likely need to explore getting a land loan. Land loans work a bit differently than traditional mortgage loans for purchasing an existing home. Here's an overview of how the land loan process typically works in Florida:

Zoning and Purpose

The first step is determining your intended purpose for purchasing the vacant land. In Florida, the allowable uses and financing options can vary based on whether the land is zoned for residential, commercial, agricultural or other purposes. Lenders need to know upfront what you plan to do with the land, such as building your primary residence.


Once you've identified a piece of land to potentially purchase and your intended purpose, it's wise to get pre-approved for a land loan. This involves providing documentation on your income, assets, and creditworthiness to a lender that offers land loans. The lender will let you know the loan amount and terms you can likely qualify for.

Down Payment

Land loans typically require higher down payments than home mortgages, often 20-30% or more of the purchase price. This is because vacant land is generally viewed as a riskier investment by lenders since it doesn't have an existing structure. Having a larger down payment shows your committed investment.

At Farm Credit of Central Florida, our lot loan requirements include a minimum down payment of 25%. Unfortunately, we do not provide any assistance programs for down payments on these types of loans.

However, if your intention is to use the land for agricultural purposes with no plans to construct a primary residence, our farm loan product may be a more suitable option. Farm loans have varying down payment requirements and terms, with a typical down payment of 80%.

Lender Requirements

Each lender will have their own specific underwriting requirements for land loans. They'll likely want information like real estate appraisals, land surveys, details on utilities/access, proof of water and septic feasibility if building a home, and your construction timeline and budget if applicable.

Farm Credit of Central Florida does not have a timeframe on lot loans of when the borrower must start building their home. Many other lenders in the Central Florida area have requirements for this.

Shorter Terms

Land loans often come with shorter repayment timelines than a 30-year residential mortgage. Loan terms of 10-20 years are common, with adjustable or higher interest rates since the collateral is just the raw land initially

Release Process

If you're using the land loan to acquire a lot where you'll be building a home, many lenders do a release process. This involves doing construction loan draws and inspections, with payments released to your builder as work progresses. The goal is limiting the lender's risk during the construction phase.

Get Expert Guidance

Purchasing land involves many steps, so it's wise to work with an experienced lender familiar with land loans in Florida. They can help guide you through the entire process and requirements based on your specific goals for the property.

Whether you plan to build your dream home or have other plans for vacant land, understanding how land loans work in Florida will help set you up for success. With some preparation and the right financing, that perfect piece of Florida land can become yours!

If you’re interested in taking the next steps to securing a land loan. We can help at Farm Credit of Central Florida. We specialize in rural home, farm, and land loans, and we we’re here to help. For more information visit us at or call us at 863-682-4117.


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