Lot and land loans in California
California’s got some of the best land opportunities you’ll find, whether it’s that custom home you’ve been doodling on napkins or a development play that could really pay off. Raw land in the Central Valley? Improved lot in the Bay Area? Ag property for a family compound? With the right financing, you can stop dreaming and start doing. Planning to build? You’ll want to look into construction-to-permanent loans when the time comes.
Understanding California Land Loans
Land loans aren’t like regular mortgages. They’re trickier because vacant land scares lenders. And honestly? They should be nervous.
No rental income. Permits that might never happen. Values that bounce around like crazy. Finding comps? Ha! And here’s the kicker: you could own that dirt for years without making a dime off it. So yeah, expect bigger down payments and shorter terms. It’s just how this game works.
Types of Land and Lots We Finance
What Is Raw Land Financing in California?
Wilderness time. We’re talking zero (and I mean ZERO) improvements. No water. No sewer. No power. Sometimes not even a road you’d trust your truck on.
Most lenders want 50% down on raw land because they see nothing but risk. They’re not wrong about the risk part. We do 65% LTV (35% down) on raw land with solid qualification - 650+ credit, documented income, 6 months reserves. Terms run 5-10 years typically, rates are higher than developed lots but you’re getting into the game with less cash than conventional programs demand.
How Do Improved Building Lots Differ for Financing Purposes?
Now we’re getting somewhere. The road exists. Utilities are within shouting distance. Someone actually surveyed this thing. Permits might not kill you.
We do 65% LTV (35% down) with the same qualification requirements as raw land. Terms usually land around 10 to 15 years. Rates are reasonable - better than raw land since there’s less risk with infrastructure already in place.
What Are Developed Lots and How Do They Qualify for Loans?
This is the “I don’t want drama” option. Everything’s already connected: utilities, paved road, graded dirt. Some even come with permits already pulled.
We do 65% LTV (35% down) here too, same as raw and improved land. Terms stretch up to 25 years. Best rates you’re gonna find for land because there’s almost no risk left. Other lenders might offer lower down payments on developed lots (some go down to 10-15%), but our consistent 65% LTV program works across the board without cherry-picking only the easy deals.
How Does Agricultural Land Financing Work in California?
Farm and ranch territory. You’re in A1, A2, or RA zoning land now. Minimums are usually 5 acres or more. Maybe there’s already farming happening. Water rights can make or break these deals. Seriously, don’t skip that research.
Down payments float between 25 and 40% depending on what you’re buying. USDA has programs if your property qualifies and you meet income limits. Worth checking out.
What Is the Maximum LTV for Land Loans in California?
We go up to 65% LTV with 35% down across raw land, improved lots, and developed parcels. Most lenders won’t touch raw land past 50% LTV, but we do 65% on everything - raw wilderness, partially improved, fully developed, doesn’t matter. Same ratio whether it’s land for your primary residence or an investment play. Planning to break ground within 3 years or just holding? Still 65%.
Standard qualification applies: 650+ credit, normal income docs, 6 months reserves. Land needs to be properly zoned with realistic road access and utility potential. That’s it.
How Do LTV Ratios Compare Across Different Land Types?
| Land Type | Down Payment | LTV | Qualification | Loan Amount Range |
|---|---|---|---|---|
| Raw Undeveloped Land | 35% | 65% | 650+ credit, normal income docs | $1,000 - $1,000,000 |
| Unimproved Lots | 35% | 65% | 650+ credit, normal income docs | $1,000 - $1,000,000 |
| Improved Lots (utilities/access) | 35% | 65% | 650+ credit, normal income docs | $1,000 - $1,000,000 |
| Fully Developed Lots | 35% | 65% | 650+ credit, normal income docs | $1,000 - $1,000,000 |
Buying something bigger? Loans over $1M are available through specialized programs. Call us.
Can You Cash Out Refinance on Land You Already Own?
Yep, up to 60% LTV. No seasoning requirement, and you get to access the full appreciation since you bought it. Got land free and clear? Works. Existing land loan you want to refi? Also works. Bought 3 months ago or 10 years back? Timeline’s irrelevant. Land jumped from $200K to $350K? You can tap that gain.
Here’s a real one: client bought raw land near Fresno for $180K cash back in 2022. Appraised at $280K now. Cash-out refi at 60% LTV gave her $168K. Walked away with that cash (kept $112K in equity), used it for construction financing on a different property. Zero waiting period, no purchase price cap nonsense.
What you need for land cash-out:
- Same 650+ credit and income documentation as purchase loans
- Up to 60% LTV based on what it’s worth today, not what you paid
- No minimum ownership time - refinance whenever
- Already have a land loan? Refi it and pull cash out at the same time
- Own it outright? Cash out up to 60% of current value
Lot of folks use this to fund construction on the same dirt (transitioning to construction-to-permanent financing) or pull equity for other deals while keeping the land.
California Zoning Basics
You’ve got to understand zoning before you buy. It’s non-negotiable. R1 zones are single family only (though many areas now allow ADUs). R2 and RM zones let you go multi family, which opens up investment angles but comes with more red tape.
Agricultural zones (A1, A2) need minimum 5 acre parcels and water rights can make or break your deal.
Here’s what kills most people’s timelines: permits. Simple lots? Figure 3 to 12 months. Complex projects with environmental reviews? You’re looking at 1 to 3 years, maybe more if there are appeals. Don’t forget another 6 to 18 months for infrastructure if you need utilities and road work. For help with the purchase side, check out our purchase loan options.
Regional Land Markets
How Does This Work in the Bay Area?
Want California’s priciest dirt? Here you go. Lots run $300K to north of $2M. Quarter acre to one acre, usually. Environmental rules that’ll make you weep. But nail it? You’re in the high end custom home game with appreciation that never quits. High-value construction projects often require jumbo financing.
What Should Alameda County Land Buyers Know?
Oakland hills parcels range $400K-$1.5M for buildable lots. Fremont and Newark offer suburban lots $300K-$800K with fewer regulatory hurdles. Berkeley hillside parcels command premium pricing but face strict design review and environmental requirements. Hayward Fault proximity affects certain areas - geotechnical reports mandatory. Eastern county offers occasional large acreage parcels.
How Does Land Financing Work in Contra Costa County?
Lafayette, Danville, and Walnut Creek hills feature building lots $350K-$1M. Wildfire hazard zones require defensible space compliance. Richmond and western county offer more affordable lots $150K-$400K. Incorporated cities each maintain different permit processes and timelines. Unincorporated areas follow county procedures. Eastern Contra Costa provides occasional rural parcels.
How Does This Apply in Los Angeles?
LA’s weird. Urban lots go $150K to $800K. Suburbs run $100K to $500K. Rural spots are $50K to $300K. Every city writes its own rulebook. Growth areas can pay off big if you guess right.
How Does This Work in the Central Valley?
Affordability central. Residential lots range $30K to $150K. Ag land goes $10K to $50K per acre. Permits actually move. Population’s climbing. Your wallet survives. New to land? Start here. After building, many buyers use conventional loan programs for permanent financing.
What Financing Options Exist for Mountain and Desert Land?
Bargain basement prices. Desert starts at $10K, mountains run $20K to $200K. The problem? Water and utilities. Figure those out and you’ve got recreational or retirement gold.
What You’ll Need to Qualify
Your credit score? Aim for 650 to 680 minimum. Got 720 or better? You’ll get way better terms. Employment history matters. Lenders want to see at least 2 years of steady work. And cash? You need your down payment PLUS 6 months of reserves sitting there. Remember, no rental income’s coming in to help.
The land itself needs to pass the smell test. Is it properly zoned for what you want? Can you actually get permits without fighting city hall for 3 years? Are utilities available, or at least possible to connect? Is there real road access? Clean title? No toxic waste surprise? Soil that won’t collapse when you dig? You know, the basics that save you from disaster.
Down payment with us? 35% (65% LTV) across the board. Doesn’t matter if it’s raw wilderness or a fully developed lot ready to build - same down payment, same program. Most lenders make you put down 50% on raw land while offering 10-15% on developed lots. We keep it consistent because we’re not cherry-picking only the safe bets.
Planning to build soon? Most people transition to construction financing within 3 years. Some lenders do land-to-construction packages with just one closing, which honestly saves you a ton of paperwork headaches.
Working with A Good Lender
We’ve been doing California land deals for nearly four decades, so we’ve seen everything. The deals that fly and the ones that crash and burn. We know which lenders actually do land financing (it’s fewer than you think), how California’s zoning maze works, and where the hidden costs pop up.
Our process is straightforward:
- Figure out if the land works — development potential, regulatory headaches
- Plan your financing — optimal structure, down payment strategy
- Match you with the right lender — not all of them do every land type
- Guide you through due diligence — this is where deals die if you skip steps
- Set up your construction transition — if you’re planning to build
Is a Land Loan Right for You?
Owning land is awesome. It’s your blank canvas for custom development, long term investment, or that lifestyle change you’ve been dreaming about. But let’s be real: it takes solid planning, proper financing, and honest expectations about how long things actually take.
When Do Land Loans Make Sense for California Buyers?
- You’ve got specific plans and a realistic timeline
- You understand the zoning and permit game
- You can afford the down payment plus development costs
- You’re okay making payments without rental income
- You know development’s going to throw curveballs
When Should You Consider Alternatives to Land Loans?
- Your budget’s too tight for both down payment and development
- You’ve never dealt with permits and regs before
- You need cash flow right away
- The market’s not cooperating with your timeline
Ready to Own Your Perfect Building Site?
Land’s one of those foundational investments. Literally the ground under your future home, business, or investment portfolio. Whether it’s a small building lot for your dream house or a bigger parcel for development, the right financing makes it happen.
We get California’s land markets. All of them. Bay Area chaos, Central Valley opportunity, desert infrastructure nightmares, you name it. We’ll walk you through the financing options, help you understand what the land can actually do, and plan for success without the rose colored glasses.
Ready to talk land financing? Call (510) 589-4096 to discuss your specific goals or view all construction and renovation programs.
Explore More Construction & Renovation Options
Not sure if land financing fits your situation? Compare our other construction and renovation programs including construction-to-permanent loans (build on your land), bridge loans (buy before selling), renovation loans (home improvements), and fix & flip loans (investment properties) to find the perfect fit for your California project.
