5 Best Land and Lot Loans in Kansas

The Sunflower State has a lot to offer across what the United States Census Bureau says are 81,759 square miles of land, not the least of which are those stunning plains and solid midwestern values. 

While quality of life can be great in Kansas, it’s not necessarily the best time for many to buy a new home.  However, with the value per acre of land in Kansas at $4220.14, per the New Estimates of Value of Land of the United States, Kansans might actually find it more affordable to buy land and then build their own custom home. 

Also known as lot loans, land loans let you purchase land and do with it as you will. That can mean letting it sit fallow or it can mean eventually using it as collateral to take out a Kansas construction loan to build your own house. If you do the math, you might well find that this process is much cheaper than buying a newly built home and will leave you with a home that is more to your tastes.  

The pros and cons of a land loan in Kansas

Assume you want to save up for a big down payment on a house and get a mortgage. You qualify for a mortgage of up to $250,000, according to the mortgage calculator you used when you started saving. Saving the required $50,000 for your down payment will take you some time.

If the price of property rises by 10% per year for the next three years, the home that once cost $250,000 will now cost a whole lot more when you’re ready to buy.   After all that, you don’t have the required down payment and you don’t qualify for the mortgage.

One possibility is to reduce your plans and settle for something smaller with less of what you desire and require in a home.

Alternatively, you could use the money you have now to secure a land loan, purchase your dream location, and save to build your dream home in a few years.

That is the primary “benefit” of obtaining a Kansas lot loan. However, there are times when this comes at a cost. You will still need to make a down payment, but it will be less than that required on most mortgages. A land loan may also have a higher interest rate because it exposes the lender to more risks, but many consider that price worth it. 

5 Best Kansas land loan lenders

Some lenders only offer land loans for residential projects, while other programs can lend to those that are pursuing recreational or agri-business purchases.

1. The Community Bank

The Community Bank was started in 1998 as an institution that would provide the Oklahoma Panhandle and Southwest Kansas with a superior bank that could meet all of their customers’ needs. The Community Bank did that by offering products like land and construction loans to their members.

We reached out to The Community Bank to discuss land loan details, which you can read about below:

• Build any commercial property from the ground up
• Purchase and develop your land your way
• Fixed or variable rates
• Money provided as upfront lump sum
• Flexible down payments
• Local decision-making

When you’re ready to connect with a loan officer, use our form to quickly match with land and lot loan programs based on your specific circumstances.

2. Community Bank of Pleasant Hill

Founded in 2006, Community Bank of Pleasant Hill is a locally owned community bank that acquired First Trust of MidAmerica in 2012 that has grown to serve the community. The community bank offers Midwest residents access to competitive loans for land and lot loans designed for residential use and development.

We reached out to Community Bank of Pleasant Hill to discuss land loan details, which you can read about below:

• Local decision-making and processing in Cass County
• Repayment terms designed around borrower
• No prepayment penalty
• All loans subject to credit approval

When you’re ready to connect with a loan officer, use our form to quickly match with land and lot loan programs based on your specific circumstances.

Envista Credit Union

Founded by residents of Kansas in 1957, Envista Credit Union is a not-for-profit financial institution and the largest credit union in Topeka. It has about $500 million in total assets. Envista offers a range of lending options, including land loans for urban and rural land development for personal use.

We asked Envista Credit Union for more details on their vacant land loan product and here is what they said:

• Many different products available
• Financing for urban and rural land available
• Local decision-making and in-house processing

When you’re ready to connect with a loan officer, use our form to quickly match with land and lot loan programs based on your specific circumstances.

3. Communication Federal Credit Union

Noted as one of the most recognized credit unions in Oklahoma, Communication Federal Credit Union is a 95,000-member strong lending organization. Founded in 1939, this full-service credit union has 22 branches across Kansas and Oklahoma and offers loans for both land and lot development for non-commercial projects.

We reached out to Communication Federal Credit Union to discuss land loan details, which you can read about below:

• Available for purchases up to 100 acres, zoned non-commercial
• Down payments for land starting at 5%
• Terms of 5, 10, or 15 Years Available
• Maximum LTV of 95% on purchases or 75% on refinanced loans
• Land must be undeveloped and not used as agricultural in nature, such as farms, orchards, or ranches.
• A land loan will not be given any value for any outbuildings or any other dwellings on the undeveloped land.

When you’re ready to connect with a loan officer, use our form to quickly match with land and lot loan programs based on your specific circumstances.

4. Citizens Bank & Trust

Based in North Alabama, Citizens Bank & Trust provides a number of services for those living in the area and looking to invest in property. Citizens Bank & Trust offers land loans and construction loans to help with the purchase of property as well as the building on property.

We reached out to Citizens Bank & Trust to discuss land loan details, which you can read about below:

• Available for home construction or land
• Available for primary residence or secondary home construction
• Draw system: funds can be disbursed in stages as construction progresses
• May roll into permanent loan, saving on closing costs
• Local decision-making and processing

When you’re ready to connect with a loan officer, use our form to quickly match with land and lot loan programs based on your specific circumstances.

How are Kansas land loans different from other loans?

Land loans are only available for the purchase of land. They are classified into different types: raw land loans and unimproved and improved loans. Unimproved and improved loans, are available for parcels with some utilities or all the utilities you need, respectively. To buy real estate, you have multiple loan options available to you, including going through an equal housing lender or taking out lines of credit. You might even take out a construction loan or refinance a current property to make the purchase possible. But looking beyond typical home loans, you might be able to use a land loan instead.

A land loan differs from a construction loan in that it is only for the land. You are not required to build on the land and can plan your future construction on your own terms.

Land loans are also distinct from farm loans, which require you to use your purchased land for agriculture. In short, a land loan gives you the most flexibility with your land. Whether you’re a first-time homebuyer or an experienced borrower, check out the NMLS to see if you can find a piece of land that’s perfect for your new home. With many loan types to choose from, do your research on loan rates and monthly payments to decide if a land loan could help you build a residential property or get started as ranchers. The loan process could be completed for a land purchase once you have all the details needed for your application process.

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