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Understanding How Land Loans Work for Property in Orange County

Often, buyers that start out seeking the perfect home determine that their best option is to build their own house and find themselves in the Orange County land market. Other buyers are seeking land for commercial reasons that no existing property will suit. No matter what your purpose for the land, it’s crucial that you understand how land loans work for property in Orange County.

Title and Survey

Obtaining a title search will help you know that your property will be clear of any liens. You must take steps to ensure that you can legally use the land as you wish. It’s essential to have a survey to define what you are buying clearly. Often, new land sales are from the sale of a smaller tract from a larger parcel. Providing the lender with a land survey and proof of due diligence regarding any restrictions in access or zoning will speed the process and work in your favor when approaching a lender. A survey will also provide the lender information about the flood zone and if flood insurance will be required. The lender will want to ensure that you have access to the land and the existence of any easements.

Land Use 

The way mortgage loans on property with existing improvements, such as homes or commercial buildings, and how land loans work for property in Orange County are two very different ball games in the lender’s eyes. There are varying types of land loans based on the planned use and the timing of any construction. There are typically three types of land loans: raw land loans, unimproved land loans, and improved land loans. Raw land is entirely undeveloped without utilities or roads. Unimproved land is similar to raw land, having utilities accessible but no meter yet installed. Improved land or developed land will have roads, utilities and is typically more expensive yet easier to finance.


While the value of homes or other buildings is relatively easy to determine, a piece of land is not so cut and dry because there is no physical collateral. For this reason, these lenders look for good credit where land is involved. The lender is taking a more considerable risk with land loans for property in Orange County. As a result, you pay more interest as well. However, the interest rate for the primary residence will be lower than if the loan is for commercial property. When you apply for land loans for property in Orange County, you must also make a larger down payment on the land. 


So now, where do you go to obtain a loan for land in Orange County? You would approach attaining a land loan in much the same way as a mortgage and from the same type of lender, from a community bank or credit union in Orange County. However, depending on the intended use, there may be other options for you to explore.  The approval process is much like that of obtaining a mortgage. Seller financing may be another option, especially when an owner is subdividing a large tract for development. For rural areas, if you are building a primary residence, there are USDA loans available. SBA 504 loans may be well suited to your needs if you are in the Orange County market for commercial purposes, from the Small Business Administration SBA.

Are you looking for land loans for property in Orange County? You can turn to experts like the pros at H&M Realty Group to help guide you to the right loan and the best land for you in Orange County. At H&M Realty Group, we have a steady supply of land inventory available! Call H&M Realty Group at 949-625-4533 or send us a message today!


Broker/Realtor/Investor/Mentor (41 years experience) Specialties: Buyer's Agent, Listing Agent, Foreclosure, Short-Sale, Property Management, Landlord I'm a Full Time Real Estate Professional, house flipper and mentor to many of my clients. I am here to help you get top dollar for your home or get you the best price for a home that you are going to live in. I have over 40 years of real estate experience for you to draw on and actively list and sell over 20 homes a year. I have sold over 600+ homes in the last ten years alone. I am a very skillful negotiator and will work diligently to help you realize the best possible price when buying or selling your home. With my Exclusive Home Acquisition & Sales System, I can find the Right Home for You! I have access to homes no other Realtor will show you. I can show you how to save an average of $10,000.00 on the purchase price. We will find a home that fits your needs, in a neighborhood that suits your style. If you are selling your home then I can bring all the professionals to you. I always include professional photos in ALL my listings. I have contractors standing by to assist with those upgrades if needed. I can also quickly get you ALL CASH offers for your home if you desire. My marketing surpasses all other agents. It begins with extensive internet advertising to hundreds of websites throughout the world. I do direct mail marketing for you home and also knock on doors in your neighborhood when I am holding an open house. I hold you home open to expose it to as many buyers as possible. My Exclusive program is designed to sell your home for Top Dollar in Any market. I am an experienced flipper here in Orange County and therefore can offer you my over 40 years of real estate experience. The information is available to you at no charge! If you like what you see, please call me and setup Your Free Consultation.

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