Land Financing

Commercial Land Loans and Pre-Development Financing

Commercial land loans finance the acquisition of entitled, partially entitled, or raw land for future development. These short-term facilities cover land purchases, pre-development costs, and entitlement carrying costs while sponsors pursue permits, environmental clearances, and project approvals. Minimum loan size is $1 million. Lenders include private lenders, debt funds, and specialized land banks with appetite for predevelopment risk.

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Key Features

Land Loans at a Glance

Loan Amount

$1M - $30M+

Term

12 - 36 Months

Rates

8.00% - 14.00%

Ltv

Up to 65% of Land Value

Structure

Interest-Only, Flexible Draw Structure

Recourse

Recourse Typical

Overview

Commercial Land Acquisition and Pre-Development Financing

Land financing is the highest-risk category in commercial real estate lending because collateral value depends entirely on entitlement outcomes and future development feasibility. Conventional banks rarely lend on unentitled or partially entitled land, leaving the market to private lenders, debt funds, and family offices with appetite for development risk. Key underwriting factors include entitlement status, sponsor track record, comparable development sales, market absorption data, and the path to a bankable construction loan. Entitled land with approved plans and permits commands significantly better terms than raw land. Deals in supply-constrained markets with documented developer experience are the most competitive.

Lender Sources

Private Lenders
Debt Funds
Hard Money Lenders
Family Offices
Specialty Land Banks

Ideal For

Entitled residential and commercial land acquisitions ready for construction start
Partially entitled land while entitlement process is completed
Lot acquisition for homebuilders with active absorption in the submarket
Industrial and logistics land in high-demand corridors near major distribution hubs
Infill land assemblage in urban markets for mixed-use development
Agricultural and transitional land being repositioned for commercial development

Commercial Land Loans and Pre-Development Financing

Land Loans at a Glance

Commercial Land Acquisition and Pre-Development Financing

Lender Sources

Ideal For

Land Loans by City

Related Property Types

Land Loans FAQ

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