Frequently Asked Questions About Buying Recreational Land
Dreaming of owning recreational property for hunting, camping or simply enjoying the great outdoors? GreenStone can help make that dream a reality. Below are some of the most frequently-asked questions we hear from consumers interested in financing recreational land.
Does GreenStone Farm Credit Services only finance farm land?
While GreenStone specializes in financing agricultural land, we also finance vacant land for recreation, future home sites, and some commercial purposes related to agriculture. GreenStone typically finances land or homes located in rural or semi-rural areas, rather than within larger cities. In some cases, properties located within larger cities can be considered if they are 10 acres or more.
What loan terms are available?
GreenStone offers fixed rates for up to 30 years for vacant land loans. The desired loan amount, your credit situation and other factors can also affect loan term.
How much down payment will I need?
A typical down payment is 20% to 25%, depending on the land to be financed and the credit profile of the prospective borrower. In certain situations, collateral other than cash, such as equity in an owned home or other property, can be used instead of a cash down payment. View our disclosures page to see an example of the loan structure.
What interest rate can I expect?
Land loan interest rates depend on various factors, such as the prospect’s credit score and payment history, loan term desired and down payment. Interest rates change frequently, so it’s best to speak with one of our financial services officers for an accurate rate quote.
Is there a minimum acreage requirement?
GreenStone can finance rural properties ranging from smaller lots to unlimited acreage. Smaller lots must be in rural or semi-rural areas, not located within city limits.
Can I include the cost of planned improvements, such as a pole barn, pond or hunting shack, in my loan?
GreenStone can sometimes include future improvements in the land purchase, depending on various factors such as land value compared to desired loan amount, down payment, your credit situation, cost and scope of the desired improvements and other relevant factors. Other times it may be best to purchase the land and then apply for a separate construction loan, depending on your unique situation. Please speak to a GreenStone lending expert to evaluate your situation and advise which option will be best for you.
I may want to build a home on my land in the future, but those plans are uncertain at this time. Is that OK?
Yes, GreenStone offers various financing options to meet your unique situation when you’re ready to build. Different restrictions and options apply depending on property acreage, usage, location and whether the home will be a primary or secondary residence, so it is best to speak with a GreenStone lending expert during the early construction planning stage to explore your financing options.
Do I need to be pre-qualified before I start looking for land?
While it is not strictly required by all realtors, pre-qualification is a good idea to ensure you can move quickly when you do find your perfect piece of land, especially in a competitive market. Pre-qualification also gives you a good idea of your max budget for a land purchase, and pre-qualified offers are typically given preference by sellers as they are proof of your serious intent to purchase.
Evaluating the property
Once you’ve found the perfect piece of land, below are some questions you may want to consider to ensure the land will be suitable for your intended purpose
Will I have access to necessary utilities on this property?
If you intend to build in the future, or if you will need water or electricity for other purposes such as camping or hunting, be sure to research availability of utilities. Will the property be served by municipal water supply, or will you need to dig a well? Does the land have public sewer access, or will a septic system be necessary? If septic is the only option, does the land pass a percolation test to ensure it is suitable for a septic system? Is electrical service available, and if not, what is the cost to bring electrical lines to the property? Does the land have internet access, and if not, are there available options (hotspot, satellite) if WIFI is required?
Is the land included in any conservation programs or restrictions?
If the land is under any conservation restrictions, it may prevent land owners from clearing, planting or hunting on the land. For example, a marsh or pond on the property may qualify as a wetland and thus cannot be filled in or significantly altered. Ask the seller whether any such restrictions apply to avoid future unpleasant surprises!
What rights and titles are included with the property?
Rights included may be related to road access, mineral rights, development rights, etc. A title is a variety of rights for a piece of property, such as exclusive permission to use and access easements. Titles are passed down from owner to owner and can become unclear or complicated over time. Take time to study the title and consider contacting a title attorney if property rights or restrictions are unclear. Doing so can save unexpected surprises down the road.
Are there nearby properties or amenities that may affect my enjoyment of this property?
Nearby biking or hiking trails, lakes or rivers for kayaking, or dining, shopping or entertainment amenities can increase your enjoyment of your land. Likewise, if you intend to use the land for hunting or as a quiet retreat, you’ll want to research surrounding properties to determine any nearby sources of undesirable noise, traffic, etc. If you intend to resell the land someday, keep in mind that the school district can significantly affect desirability for future buyers intending to use it as a home site. Also keep in mind that use or appearance of surrounding properties may change in the future; be sure to base future land use plans only on the property you will own.
I would like to start a small business on this property someday, such as a small farm or hunting preserve. Is that OK?
Check with local zoning authorities if you desire to use the land for commercial purposes in the future. Zoning restrictions may prohibit such use, and it is not always easy to achieve exceptions to such restrictions. GreenStone FCS customers typically do not experience these issues but be sure to discuss future land use with your loan officer to ensure suitability.
We hope you’ve gained some knowledge about buying recreational or vacant land, and we wish you luck in your search for the perfect property. Recreational land can be a wonderful getaway, a relaxing place to hunt or create family memories - and it can also be a sound investment for the future.
When you’re ready to take the next steps toward land ownership, apply now, or call your local branch at 800-444-3276.