5 Best Land and Lot Loans in Michigan


Michigan land loans can give you an easier way to eventually own a home or vacation property in Michigan.

Key Terms

  • Land loans can make more expensive areas, including lakefront neighborhoods.
  • Until you build on a lot, you will not need to pay for any insurance.
  • In some cases, the purchased land can be used as collateral on a construction loan when you’re ready to build.

Home to the longest freshwater coastline in the U.S. and with a layout that means you’re never more than 85 miles from a lake, Michigan is a dream for those who love the outdoors. It’s also great for those who love quality universities, hospitals and, music, courtesy of Detroit.

Unfortunately, owning a home in Michigan is too expensive for many right now. According to the U.S. Census Bureau, Michigan has 55,608 square miles of land. Even with all those miles, however, it can be difficult to find the right home. 

With a Michigan land loan, you can secure a property in your favorite neighborhood and build a home that really gives you what you want. Unlike Michigan construction loans, which finance a construction project specifically, a land loan, or “lot loan,” is just for the land and gives you some flexibility as to when you start a build.

With the value per acre of land in Michigan at $23,765.04, per the New Estimates of Value of Land of the United States, many Michganders might discover that this approach can get them a bespoke home that is well within their budget.  

Show Me Lenders

Benefits of getting a land loan in Michigan

What are some of the benefits of obtaining a Michigan lot loan, as they are sometimes called? A land loan gives you the following advantages: 

  • With a land loan, you can take your time and build a home on your own schedule.
  • Because of land financing, you can construct a completely customized home.
  • Building a home from the ground up can sometimes be easier and less expensive than remodeling an existing one.
  • You will not be required to pay for any land insurance until your home is built.

Naturally, a land loan also allows many buyers to purchase property in areas they would not be able to afford otherwise, including popular lakefront areas. Michiganders who never thought they could afford a vacation home or fishing cabin might find it more manageable with a land loan. Finding the right mortgage lender or land loan lender is not always easy, but it helps to know who provides these different term loans with personalized service.

Get Quotes for Your Land Loan

5 Best Michigan land loan lenders

If you’re ready to learn more about the best land loan lenders in Michigan, here are the top options we’ve found through our research.

1. Mercantile Bank

Based in Michigan, Mercantile Bank provides a number of banking, loan, and financial services to members in many parts of Michigan and Cincinnati, Ohio. Mercantile bank offers a number of products to help obtain property and for construction, including lot loans, land loans, and pole barn loans.

We reached out to Mercantile Bank to discuss its land loan program, which you can read about below:

  • Lot Loan: If you are purchasing less than 10 acres, you can obtain a lot loan. This property does not need to be in a subdivision.
  • Land Loan: Land Loans are for parcels over 10 acres. These loans require a larger down payment.
  • Pole Barn: Not quite land you’re looking for? Found that pole barn to store your toys? We can help finance these as well.

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. GreenStone Farm Credit

GreenStone Farm Credit owns and manages $12 billion in assets and has 35 branches across Michigan and northeast Wisconsin to meet the needs of over 28,000 members. It provides lot and land loans for vacant home site development with no acreage restrictions and flexible loan terms.

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

  • No acreage restrictions
  • Typically require a down payment
  • Build when you are ready
  • Financing for site improvements available
  • Choose from a variety of fixed, adjustable, and variable rate loans with flexible terms for multi-year schedules

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. Honor Bank

Honor Bank, founded in 1917, provides financial services in the Greater Traverse City area across eight locations in northern Michigan. This full-service bank offers lot and land loans in the region with competitive interest rates and 25% down on no-hassle construction loans.

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

  • Lot and land loans available in northern Michigan only
  • Requires 25% down
  • Remaining balance on the loan may be paid off with a construction loan from Honor Bank

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. United Bank of Michigan

Started in 1903, United Bank of Michigan works to create a customized banking experience for all of its customers, no matter how big or small their needs are. United Bank of Michigan offers a number of products, including land or lot loans that need as little as 10% down.

We reached out to United Bank of Michigan to discuss land loan details, which you can read about below:

  • Loans available for land used in home construction or recreation
  • 3/1 adjustable-rate mortgage on a 20-year term
  • For home construction: 10% down payment on land/lots up to 20 acres
  • Recreational property: 35% down payment on land/lots over 20 acres

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. Northpointe Bank

Northpointe Bank offers a number of products and services to meet the needs of all of its customers. At Northpointe Bank, customers are able to secure loans and financing to meet all of their goals through loan and investment products, including lot loans.

We contacted Northpointe Bank to learn more about its land loan program and here are some key terms:

  • Land must be buildable
  • Loan amounts range from $10,000 to $650,000
  • 1/6, 3/6, 5/6 and 7/6 adjustable-rate mortgages available
  • Down payment of at least 20% required

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.

Is a Michigan land loan the right choice for you?

While the cost of an acre in Michigan is relatively high in comparison to other states, you may find that purchasing just enough land for a nice home and then constructing your own home is still less expensive than purchasing a built home. It can also give you an easier way to get into some expensive or coveted neighborhoods. If you have access to refinancing, money market funds, credit cards, or personal loans, you may be able to come up with some of the funds you need to buy land. However, for bigger purchases, you might need to explore land loans instead.

Do your homework and crunch the numbers to ensure that this is the case for your project. With various loan options out there, calculators really help you determine the right choice for you. Review disclosures, loan rates, loan terms, and credit scores needed before you start the process for a recreational land loan.

Buying real estate in Michigan is not right for everyone, since you’ll have to build in the time to get the home up on the loan. But vacant land loans are a good fit for someone who wants to create their dream home from scratch and set up the property the way they want.

A traditional home loan lender like a credit union may have many requirements for you to meet in your mortgage loan, which could make it challenging for you to get your new home. If you’d rather build on your undeveloped land and create a perfect property for your new home, a land loan might be better for some borrowers who want extra financing options. With a traditional equal housing lender mortgage loan or home equity line of credit, this may not work for you to purchase land.

The good news is that Michigan land loans allow you to be flexible. You can devote the time required to assess your financial situation, select a design, and build your ideal home. If you find that appealing and are not in a hurry to relocate, a land loan is an excellent option.

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.

Find a Land Loan Specialist

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.

Save more money than your friends

One email each week covers personal finance, financial independence, investing and other stuff for lawyers that makes you better.