Can I finance raw land in Northeast Texas?
Reviewed August 2026 by Shannon Miles Group
Yes, but it is different from financing a home. Raw land loans typically require larger down payments (20 to 50 percent), have higher interest rates, and shorter terms. Some local banks and credit unions in Northeast Texas offer land loans with competitive terms.
Understanding land loan options.
Financing raw land is more challenging than financing a home because land does not generate income and serves as less predictable collateral for lenders. But there are several paths to get it done.
Types of land loans
Raw land loans
For undeveloped land with no improvements. These carry the highest rates and largest down payment requirements because the land has no income and no structure to secure the loan.
Land with improvements
If the property has utilities, road access, or other improvements, the terms may be more favorable. Improved land is less risky for lenders.
Construction-to-permanent loans
If you plan to build, this loan combines the land purchase and construction into one loan that converts to a permanent mortgage when construction is complete.
Seller financing
Some sellers in rural areas are willing to finance the purchase themselves. This can offer more flexible terms and lower closing costs. Common in Northeast Texas for acreage and rural properties.
Financing land in our area.
Local lenders in Paris, Sherman, and surrounding areas often have better terms for Northeast Texas land than national lenders. Community banks understand local property values and may be more flexible with their lending criteria. They know the market and can evaluate land value based on local knowledge rather than automated models.
Seller financing is also common in rural areas of Northeast Texas. If the seller owns the land free and clear, they may be willing to carry a note at a negotiated interest rate. This can be a win-win: you get flexible terms, and the seller gets a steady income stream from the note.
Key factors for land financing.
- Down payment. Expect to put down 20 to 50 percent for raw land. Improved land may require less.
- Interest rates. Land loan rates are typically 1 to 3 percentage points higher than mortgage rates for improved properties.
- Loan terms. Land loans often have shorter terms (5 to 15 years) with a balloon payment at the end. Some lenders offer longer amortization.
- Property taxes. Factor property taxes into your carrying costs. An agricultural exemption can significantly reduce this burden.
- Shop around. Talk to multiple lenders, including local banks, credit unions, and agricultural lenders. Terms vary widely.
More answers you might find useful.
We are happy to help you think it through.
Not every financing question fits neatly into a guide. Call us, stop by the office at 2322 Lamar Ave. in Paris, or send a note. We answer real questions from real people every day.