Land Loans 2026: Who Lends on Vacant Land, at What Terms

Is a land loan a conventional loan? What the rules say

In everyday use, “conventional” means a mortgage that follows Fannie Mae or Freddie Mac rules and can be sold to them. On that meaning, no: both agencies exclude vacant land in their guides. Fannie Mae's Selling Guide B2-3-01 lists “vacant land or land development properties” among ineligible properties, and Freddie Mac's Guide Section 5601.1 lists “Vacant land, undeveloped land or land development properties”. Every land loan is therefore a portfolio loan: the bank, credit union or Farm Credit association keeps it and sets its own price, down payment and term. That single fact explains why terms vary so much from one lender to the next.

The consumer-protection rules also split in a way most land buyers do not expect. These are federal rules for a person borrowing for personal use; a loan “primarily for a business, commercial or agricultural purpose” is exempt from Regulation Z altogether (12 CFR 1026.3(a)(1)).

Which federal mortgage rules reach a land-only loan to a consumer (our reading of the official text, eCFR as of October 1, 2026)

What this means in practice (our reading): a lender making a land loan to a consumer does not have to run the ability-to-repay test that governs house mortgages, but it does owe you a Loan Estimate within the TRID timelines, which is the document to compare offers on. Once the loan is for a business purpose (most investor, farm and development land), neither applies, and the terms are whatever the commitment letter says.

Who actually lends on land: the federal record

The pages ranking for “land loans” today are individual banks and credit unions describing their own product. None of them says how big each kind of lender is. Four federal sources do, each with its own definition.

Land and farm real estate lending by lender type, latest federal figures

The definitions matter, because the banks' land line is wider than land. The Call Report instructions tell banks to include in item 1.a “Loans secured by vacant land, except land known to be used or usable for agricultural purposes, such as crop and livestock production”, which go to the farmland line instead. The same item also holds the financing of land development and of commercial construction. Banks do not report raw land on its own anywhere in the Call Report, so the $362.1 billion is the line that contains bank lending on vacant non-farm land, not a count of it.

Farm real estate debt by lender, USDA ERS (end of year, excluding operator dwellings)

Over nine years the Farm Credit System took share from banks: 45.9% to 50.5% while banks went from 37.4% to 30.5% (our arithmetic from the ERS file). Individuals and others, the category for lending outside banks, Farm Credit, insurers and government, held $19.6 billion, about one dollar in twenty. ERS does not split that category further in the file we read.

Where land sits in a bank's books, 2007 to 2026

The bank line that holds vacant land has been through one full cycle. It peaked at $434.7 billion in June 2008, fell to $161.1 billion by June 2013 and stood at $362.1 billion on June 30, 2026, 4.6% lower than a year earlier (our arithmetic from the FDIC series).

Banks' land and development line and farmland loans, June 30 of each year (FDIC Call Reports)

Two things for a borrower. First, after 2010, when more than one dollar in seven of this line was nonaccrual or 90 days late, the line shrank by 62.9% between June 2008 and June 2013 (our arithmetic); that history is why bank land loans carry large down payments and short terms. Second, the late share has risen from 0.43% in 2019 to 1.09% in June 2026 (our arithmetic), still far from 2010 but moving the wrong way, while the line itself is shrinking. Farmland loans kept growing through the whole period.

Who holds bank land loans, by bank size, June 30, 2026 (our arithmetic from FDIC institution data)

The farmland column is the one to read if you are buying acreage: 82.3% of bank farmland loans sit at banks under $10 billion (our sum). For the land and development line the dollars are spread across sizes, but it is a much larger part of the loan book at banks between $1 billion and $10 billion (5.66%) than at the largest (1.33%). The ten largest holders, led by JPMorgan Chase Bank ($15.9 billion), have 23.0% of the line, most of it commercial construction rather than lots. 3,606 of the 4,313 institutions reported some of it, and 3,421 reported farmland loans.

Farm, ranch and recreational land: why Farm Credit is the largest land lender

The Farm Credit System is a group of borrower-owned lenders chartered by Congress, and its Second Quarter 2026 Quarterly Information Statement (August 7, 2026) describes 54 Agricultural Credit Associations and one Federal Land Credit Association making loans to “farmers, ranchers, producers or harvesters of aquatic products, farm-related businesses and rural homeowners”. Who counts as a farmer is broader than most land buyers think. The Farm Credit Administration's rule defines a bona fide farmer or rancher as “a person owning agricultural land or engaged in the production of agricultural products” (12 CFR 613.3000(a)(1)). Owning agricultural land is enough to be in the door; each association still decides whether the parcel and the borrower qualify.

Farm Credit System real estate lending, from its quarterly statement

The statement says it plainly: “By regulation, real estate mortgage loans must have a loan-to-value ratio of 85% or less at origination”, up to 97% if a government agency guarantees the loan. That is why the floor on a Farm Credit land loan is 15% down. The 5.76% is the average yield on the whole book, old loans included, not the rate on a new loan today; it is the best public measure of what Farm Credit borrowers pay on average.

The government lender is USDA's Farm Service Agency. Its direct farm ownership rate effective October 1, 2026 is 6.250%, with 4.250% on joint financing and 2.250% on its down payment program; FSA held $15.3 billion of farm real estate debt at the end of 2025 (ERS). FSA lends to people who will operate a farm, not to buyers of recreational or investment land.

A price check with the USDA land values (our arithmetic, examples only): 40 acres at the 2026 US pasture average of $2,000 an acre is $80,000. At Farm Credit's 85% ceiling the cash down is at least $12,000; at the 35% that Farm Credit Services of America calls typical for many new land purchases it is $28,000. On 40 acres of cropland at the $6,020 average ($240,800), the same two cases are $36,120 and $84,280. Local prices differ widely from the national average, so use the appraisal, not this example.

What lenders publish: down payment, term and rate by lender type

National data cannot give you a quote. What lenders say on their own sites can show the range. These are their claims, saved on October 9, 2026, not offers.

Published land loan terms, by type of lender (each lender's own statement)

Against the benchmarks, Truliant's 8.24% to 8.99% APR is 0.84 to 1.59 points over the Freddie Mac 30-year house average of 7.40% (week of October 8, 2026), 2.48 to 3.23 points over the Farm Credit System's 5.76% book yield, and 1.99 to 2.74 points over FSA's 6.250% direct rate (our arithmetic). The gap between a consumer lot loan at a credit union and an agricultural loan at Farm Credit is wider than the gap between a lot loan and a house mortgage. Which door is open depends on the parcel: agricultural land opens the Farm Credit and FSA doors, a residential lot does not.

For payments, balloons and cash to close on a specific parcel, use our land loan calculator, which carries these and four other lenders' terms in its presets. If you plan to build, the land loan is usually replaced by a construction loan: see our guides to the ground-up construction loan and the construction-to-permanent loan, which can fold land and build into one closing. Buying farmland as an investment rather than to borrow against is covered in farmland investing 2026.

Taxes on land you finance: no depreciation, limited interest deduction

Three federal tax rules change the math of a land loan compared with a rental house (our reading; not tax advice).

The practical point (our reading): on raw land that earns nothing, the investment-interest limit can leave the interest undeductible for years, and section 266 is the alternative that turns it into basis. Development changes the rules again: section 1.266-1 points to the interest capitalization rules of sections 1.263A-8 through 1.263A-15, which apply before any election. Ask a tax adviser which applies to your parcel.

What a land buyer can do with this

1. Sort the parcel before you call anyone. Land used or usable for crops or livestock is farmland for banks and opens Farm Credit and FSA; a residential lot or raw non-farm acreage goes to a bank's land line or a credit union. That one fact decides which lenders will answer.
2. Call small lenders first. Banks under $10 billion hold 82.3% of bank farmland loans, and the land-development line is a bigger part of their books than at the largest banks. A Farm Credit association is the largest single source of farm real estate credit (50.5% of the total at the end of 2025).
3. Bring 15% at the very least, and plan for more. 85% is the Farm Credit ceiling by regulation; published bank and credit union terms run from 10% (one credit union, for qualified borrowers) to 50% (raw land at one bank).
4. Ask for the Loan Estimate if you borrow as a consumer. It is owed on land loans to consumers even though the ability-to-repay rule does not apply (our reading of 12 CFR 1026.19(e) and 1026.43(a)); compare APR, fees and any balloon on that form.
5. Price the interest after tax. Without depreciation and with the investment-interest limit, a land loan costs more after tax than a rental mortgage at the same rate; the section 266 election is worth a question to your preparer.

This page has no lender referral box. The lenders on our referral cards make rental, flip and construction loans, and we found no land-purchase product among them, so a card here would not fit a land buyer. If you want an email when these numbers move (the next FDIC and Farm Credit quarterly figures, and USDA's next land values), use the alert below.

FAQ

Sources, read and saved on October 12, 2026 unless stated: FDIC BankFind Suite API (api.fdic.gov/banks/financials), Call Report data for June 30 of 2007 to 2026, September 30 and December 31, 2025 and March 31, 2026, aggregated and by institution with our script fdic_land.py, whose output is saved; FFIEC 031 and 041 Call Report instructions, Schedule RC-C (FDIC copy); Farm Credit System Second Quarter 2026 Quarterly Information Statement (Federal Farm Credit Banks Funding Corporation, August 7, 2026); USDA ERS Farm Income and Wealth Statistics, September 3, 2026 release, farm real estate debt by lender, extracted with ers_lenders.py; USDA NASS Land Values 2026 Summary (July 2026; the release is dated July, not August); USDA FSA current loan interest rates (effective October 1, 2026), Freddie Mac Primary Mortgage Market Survey (October 8, 2026), Fannie Mae Selling Guide B2-3-01 (09/03/2025), Freddie Mac Guide 5601.1 and the websites of Lake Michigan Credit Union, GreenStone Farm Credit Services, Farm Credit Services of America, Canyon View Credit Union, Herring Bank, MIDFLORIDA Credit Union and Truliant Federal Credit Union, all saved October 9, 2026 (lender statements are their claims); eCFR text as of October 1, 2026 of 12 CFR 1024.5, 1026.2, 1026.3, 1026.19, 1026.43 and 613.3000 and 26 CFR 1.167(a)-2 and 1.266-1; 26 U.S.C. 163 and 266 (govinfo, 2024 edition). Banks' Call Report line for land also includes commercial construction and land development, so it is not a count of raw land loans. Shares, changes, ratios and examples are our arithmetic. This is analysis of public documents, not investment, legal or tax advice.