5 Best Land and Lot Loans in Kentucky


Kentucky land loans provide a way to finance land and eventually build a home or business.

Key Terms

  • Land loans let you buy in areas where you might not be able to afford a home.
  • Land loans, aka lot loans, let you build a home on your own time, spreading out the cost of the project.
  • These loans don’t come with the same insurance requirements as mortgages.

Home to the world famous Kentucky Derby, bourbon, and of course some of the prettiest hill country in the U.S., Kentucky gives its citizens a great quality of life. According to the United States Census Bureau, Kentucky includes some 39,492 square miles of land that includes vibrant rivers, stunning mountains, and lush forests. 

While Kentucky offers some of the best in rural living with just the right dash of city and culture, homes are getting more expensive in the state, leaving a good number of Kentuckians out of the market.  Land loans may offer a great alternative; with the value per acre in Kentucky at around $7208.98, per the New Estimates of Value of Land of the United States, citizens of Kentucky can use these loans to finance an affordable parcel of land. 

Land loans give you something a little different from construction loans in Kentucky, which are for immediate construction projects. With a lot loan, you can build a home in Kentucky and pursue your build project on your own terms. 

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How land loans work in Kentucky

Land loans in Kentucky provide you with the financing to purchase a parcel of land. Many lenders have no acreage limits on land loans, allowing you to finance very large parcels. These loans are different from farm loans or construction loans; a farm loan would require that the land be used for agricultural purposes, while a construction loan would require that you start a build right away. 

Taking out a land loan means that you can just let the land stay as is for as long as you like. If you eventually want to build a property on the parcel, your land may also serve as the collateral you need for a construction loan. Land loans are higher risk for lenders, land loans in Kentucky can sometimes require larger down payments, but there are many lenders with a range of flexible options out there. 

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5 Best Kentucky land and lot loans

If you’re in the market to purchase land in Tennessee, consider these land loan lenders that are available for projects in the state.

1. Old National Bank

Old National Bank was established in 1835 in Evansville, Indiana. From a small one-room bank to a location that is a top 35 U.S. bank, it now has $46 billion in total assets serving 250 communities in the Midwest. The bank offers lot and land loans up to 5 acres.

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

  • Lot loans available up to 5 acres
  • 15-Year Fixed1 or 5/6mo ARM with 20-Year Amortization
  • 20% minimum down payment
  • Land loans available between 5 to 20 acres
  • 15-Year Fixed or 5/6mo ARM with 20-Year Amortization
  • 35% minimum down payment
  • Available in Indiana, Kentucky, Michigan, Wisconsin and Minnesota
  • Lot and Land loans can finance purchases of either residential lots or underdeveloped 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.

2. Abound Credit Union

About Credit Union has more than 70 years of service, providing a range of banking services to those in Kentucky. The credit union provides support for new construction financing within the state, allowing for borrowing of up to 95% of the property’s appraised value for qualified borrowers.

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

  • Available throughout the state of Kentucky only
  • One time closing prior to construction
  • You can borrow up to 95% of your future home’s appraised value.
  • Instead of cash, you can use your land equity as your down payment.
  • You pay interest-only payments during the construction phase.

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. 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.

4. Ag Credit

AG Credit provides loans for small and large acreage tracks, raw land, farmland, recreational property, pastures, residential loans, and construction. Founded in 1934, it focuses on providing farmers and rural residents of Central Kentucky with access to affordable lending and personalized financing services.

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

  • Small and large acreage tracts
  • Farmland
  • Raw land
  • Recreational properties
  • Pastures
  • Residential lots
  • Construction
  • No Acreage Limits
  • Long-term fixed rates
  • Not required to build immediately after purchase

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.

5. Delta Community Credit Union

Situated in Georgia, Delta Community Credit Union is a private real estate lender offering lending service to over 470,000 members. With an online loan platform, Delta Community Credit Union offers a variety of traditional banking products including a land and lot loans program.

Recently we asked Delta Community Credit Union to provide us with details on their land loan and this is what they said:

  • 5 and 10 year terms
  • Multiple repayment options 
  • Build primary residence or vacation/seasonal home
  • No origination fee

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

Is a land loan in Kentucky right for me?

Is a land loan in Kentucky right for you? It depends on your current living situation or long-term goals. If you are looking for somewhere to live or start a business in the very near future, then a land loan isn’t necessarily right. If, however, you want to secure a lot in your favorite area and can take your time to build, one of these financial products can be great for you. 

Home loans or a refinance is a good fit if you have a piece of property you want to move into right away. A mortgage loan spread out over time could help you buy a piece of property you really want after you find it on the NMLS, but if you want to build your dream home on your own, land loans may be better. There are many loan options out there including home equity, a mortgage loan, or lines of credit, they may not work with a land purchase.

Verify in advance what to expect in the loan process, including what you qualify for, the loan rates, the credit score requirements, the loan term length, monthly payment, and refinancing options.

You also want to look at what type of land you are interested in. There are different kinds of land loans based on the state a parcel of land is in. Raw land loans give you a way to finance completely undeveloped land, while unimproved and improved loans provide financing for properties with some or a lot of infrastructure, respectively. Factor this in when making your decision on a parcel and on your financing. 

If you’re looking to explore land and lot loans in other states, check out our national overview of land loans as a starting point in your search.

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Joshua Holt

Joshua Holt is a licensed mortgage loan originator (NMLS #2306824) and founder of Biglaw Investor. His mortgage expertise lies in the areas of professional mortgage loans, particularly for lawyers, doctors and other high-income professionals. Prior to Biglaw Investor, Josh practiced private equity mergers & acquisition law for one of the largest law firms in the country.

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