Land & Lot Loans in Minnesota

Land loans in Minnesota give borrowers a way to finance real estate for a primary or secondary vacation home.

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4 Best Land and Lot Loans in Minnesota  

Key Terms

  • Land loans let you buy in popular areas, such as lakefront regions at a fraction of the cost of a built home.
  • Land loans let you build a home on your own time, spreading out the cost of the project.
  • You can save on insurance with land loans.

Minnesota has a lot more to offer than a thousand lakes, but those aren’t too shabby either! This midwestern state includes 79,627 square miles, according to the United States Census Bureau, in which you can find everything from quaint, small towns to the bright lights of the Minneapolis-St.Paul metropolitan area. 

While the cost of living in Minnesota is still lower than in many parts of the U.S, buying a home is getting more expensive, especially in metro areas and suburban areas.  With the value per acre in Minnesota at around $8,190.91, per the New Estimates of Value of Land of the United States, taking out a land loan (sometimes called a lot loan) can give Minnesotans an easier way to afford a new home. 

It works like this: You secure the property you want in the area you want. Then, you wait until your plans and your home financing are in order with a construction loan in Minnesota. Then, you build the house you want instead of settling for the house you can afford in the housing market. 

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How are land loans in Minnesota different from other mortgage loans

A construction loan in Minnesota is for a construction project that will begin immediately. A land loan is only used to fund the land itself. You can then do what you want with the land and wait as long as you want to build on that land.

There are also various types of land loans available. A raw land loan is for undeveloped property, an unimproved land loan is for a lot with some infrastructure, and an improved land loan is for a lot that is ready to be developed as a residential or commercial lot. This provides you with a variety of options to take into account in your hunt for your dream home.

Land loans in Minnesota differ from other types of home loans in terms of interest and down payment, as well. Banks may require a larger down payment on the loan amount, and these loans may have higher interest rates. The good news is that the property can be used as collateral once you’re ready to apply for a construction loan and proceed to the next step. And with the reasonable price for an acre in Minnesota, you might find that your down payment is quite manageable. 

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4 Best Minnesota land loan lenders

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

1. Affinity Plus Federal Credit Union

As a not-for-profit, member-owned credit union, Affinity Credit Union was founded in the middle of the Great Depression in April of 1930. Once known as State Capitol Credit Union, it has grown to offer a wide range of services to its members, including savings accounts, land loans without acreage limits.

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

  • No acreage limits
  • No requirement to build. Land can be used for any purpose.
  • Financing available for up to 80% of the appraised land value.
  • Fixed rates available.

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. Northview Bank

For over 100 years, Northview Bank has been serving the needs of its customers in Minnesota and Wisconsin with a number of banking products and services like business loans, refinancing and home mortgage loans. Northview Bank offers products to help secure property, including land loans for as little as 10% down payment.

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

  • Minimum down payment of 10% required
  • Available for bare land purchases
  • Available for recreational purchases
  • Local processing and underwriters

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. Members CCU

Members CCU is a credit union with multiple locations in the state of Minnesota, designed to provide banking, personal loans, home equity lines of credit, and financial services for its members. Members CCU offers a number of loan and land products, including raw land loans with low down payments and flexible repayment loan terms.

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

  • Available for raw land loans in Minnesota and Wisconsin
  • Low down payment options
  • Flexible monthly payment repayment terms
  • Local underwriting and servicing
  • Available for hunting land, lake shore land, or land to be purchased for future residence

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. Magnifi Financial

Serving parts of Minnesota, Wisconsin, and North Dakota, Magnifi Financial is a credit union established to meet the needs of all of its members with all of the products and services it offers. Magnifi Financial offers a number of loan options, including land loans to build homes, businesses, and recreation.

We asked Magnifi Financial for more details on their vacant land loan product and here is what they said:

  • Available for land loan purchases.
  • Available for recreational land purchases.
  • Available for ready-to-build plots.
  • Available for business purchases.

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.

Does a Minnesota land loan make sense for you?

If you take out a land loan, you may end up paying a little more for land financing, so if that bothers you, a lot loan may not be for you. However, you will save money on insurance, which can make the deal more appealing.

A land loan also makes good sense for homebuyers who wish to take their time with the construction process and are not in a rush to build right away. This can give you more time to find the exact layout and materials you need to build the home you’ve always wanted. Finally, if you are determined to become a homeowner in an area where you may not be able to afford a built home, a Minnesota land loan may be a good option for you.

Looking for a land or lot loan in a different state?

If you want to find the best land and lot loans in other states, click on your state below.

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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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