5 Things You Need to Know About Financing Vacant Land

By Dana Monson

My team and I are expert real estate agents with Keller Williams in Marysville, WA and serve the greater Puget Sound area, providing home-buyers and sellers with professional, responsive, and attentive real estate services since 2004. Want an agent who'll really listen to what you want in a home? Need an agent who knows how to effectively market your home so it sells? Give us a call! We are eager to help and would love to talk to you.

Are you dreaming of purchasing vacant land to build your perfect home?

Starting this exciting journey is the first step toward making that dream a reality. While financing a land purchase may seem complex, understanding the process can empower you to move forward confidently.

Whether you envision a tiny home, a manufactured home, or a custom-built sanctuary, this is uniquely rewarding and worth exploring. With the proper knowledge, you’ll be well-prepared to turn your vision into a beautiful home that reflects your dreams.

I sat down with Tim Ma, a mortgage lender with Boeing Employees’ Credit Union (BECU), to discuss the essential aspects of buying vacant land.

Here are the key points you need to know:

1. Zoning Requirements and Location: BECU offers financing for vacant land in Washington and Idaho, the primary focus states. The property must be zoned residential.

2. Acreage Limits: The maximum acreage allowed for financing is 20 acres. If you are considering larger plots, additional requirements or limitations may apply.

3. Infrastructure Matters: The presence of essential utilities like water, sewer, and electricity significantly impacts the down payment and loan terms. If these utilities are available on the property or the street, the minimum down payment is 30%, with loan amounts ranging from $50,000 to $400,000.

4. Increased Down Payment for Lack of Utilities: If any utilities are missing, the down payment requirement increases to 50%, and the maximum loan amount is capped at $200,000.

5. Prequalification Is Key: It’s highly recommended that you get prequalified before submitting an offer on a piece of land. This step ensures that you are financially prepared and can provide your loan officer’s contact information when making an offer, which can be reassuring to sellers.

As you take the next steps toward finding the perfect piece of land, remember that every great dream begins with careful planning and informed decisions. With the right approach and guidance, you’ll soon be well on your way to creating the home you’ve always envisioned and confidently move forward in your real estate journey.

If you have more questions or need personalized advice, please contact me at (425) 231-2727. I’m here to help guide you through purchasing vacant land.