4 Best Land and Lot Loans in South Dakota


Land loans are a financing option that lets you secure your ideal property and build your own home when you choose.

Key Terms

  • Land loans are a great way to build a home in an area you might not otherwise be able to afford.
  • Land loans don’t require insurance as mortgage loans do.
  • You can build a home to your own specifications on your own schedule.

Home to the stunning Badlands and the always impressive Mount Rushmore, South Dakota is a place that many are happy to call home. There’s plenty of space for everyone, too— according to the U.S. Census Bureau, there are 75,810 square miles of land in South Dakota, so you have lots of room to explore.

As prices rise across the U.S., including in South Dakota, the housing market is tightening, making it harder and harder for people to find their ideal home. In response, many are taking a new route to homeownership by buying parcels of land on which they can eventually build a custom home. This offers an easier entry point to owning a home than a home loan, in many ways, and means you don’t just have to settle for what’s out there. A purchased parcel of land can also serve as collateral on an eventual South Dakota construction loan, when you want to build. 

If you want to buy an acre or two in South Dakota, the first thing you’ll need is a way to finance your purchase. Luckily, there are many lenders in South Dakota that offer land loans (sometimes called lot loans), farm loans and other line of credit loans. Per the New Estimates of Value of Land of the United States, the value per acre of land in South Dakota is $2,135.38, making this approach potentially much more affordable than buying one of today’s built homes.

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How land loans in South Dakota are different

You’ll need to locate suitable land in South Dakota if you want to build a new residence. You can choose from various kinds of land loans to finance that land. If your chosen area is wholly undeveloped, you’ll need a raw land loan. An unimproved land loan would be necessary if there are some basic infrastructure features on a property. Finally, improved land loans are available for parcels of property that are ready for development. These are usually found in developed areas, such as cities and suburbs. 

Land loans differ from construction loans in that they only finance the land itself. You may purchase a parcel while costs are still cheap and keep it for as long as you wish.

When the alternative is settling for a smaller home you don’t necessarily like or renovating a home and getting possibly burdened with a money pit, this approach can be a better way to get the home you want in an affordable way.  

Get Quotes for Your Land Loan

5 Best South Dakota land loan lenders

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

1. American Land & Capital

American Land and Capital is based in Minnesota but provides services to builders in Minnesota, Wisconsin, South Dakota, and Florida. American Land and Capital offer a line of real estate loans that include construction mortgages, lot loans, development loans, business loans and construction loans for builders, remodelers, and land developers involved in rural development.

We reached out to American Land & Capital to discuss land loan process, which you can read about below:

  • Asset-based lending
  • No appraisal required
  • Interest only payments

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. Bank West

Started in 1889 as Pierre Bank, Bank West serves the banking needs of Pierre, South Dakota, in a variety of different ways to meet their customer’s needs. They are able to provide construction and lot loans that are designed to help customers build and develop properties.

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

  • Program prefers people who intend to build a residence versus ranchers or people with agribusiness
  • 25% down payment required.
  • Lot loan balance can be rolled into the construction loan when you’re ready to build.

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. Black Hills Federal Credit Union

Black Hills Federal Credit Union is a South Dakota financial institution that serves the entire state of South Dakota. They have 15 locations in the state and offer a wide range of financial products to both consumers and borrowers.

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

  • Interest-only payments during the construction period (up to six months)
  • Loan automatically converts to long-term conventional financing
  • Only pay closing costs once
  • Loans available to renovate (add a garage or finish a basement) before you move in

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. American Land & Capital

American Land and Capital provides construction mortgage products for those in Bismarck and Minot, South Dakota, as well as North Dakota. American Land and Capital is based in Minnesota and offers a number of products that can be used for new construction, rehabbing properties, and lot and land development.

We reached out to American Land & Capital to discuss land loan terms, which you can read about below:

  • Asset-based loans
  • Creative funding solutions
  • Mainly focuses on land loans related to construction projects, not recreational land or ranch loans

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 South Dakota land loan the right fit for you?

If the notion of constructing a house in South Dakota appeals to you and your family, or if you just want to acquire land in South Dakota for now and build later, you should think about whether a lot loan is a good option. It is sometimes challenging to complete the South Dakota land loan application procedure on your own. This is why we recommend contacting a professional loan officer who has many years of expertise and understanding and can lead you through the process of acquiring a South Dakota land loan, from online application to navigating through disclosures to building your dream house.

By working with your lender, you can determine how comfortable you are with the interest rates (fixed rates versus adjustable rates) on land loans, what kind of down payment you need, the repayment terms on the loan amount and even what type of land loan you should go for. Once the process is completed, you will have on your hands the perfect place to find competitive rates to allow you to build your perfect home. 

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.

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