Loan guide
Land & lot loans in Michigan
Financing raw land in Michigan is its own market, dominated by credit unions and shaped by an old local tradition — the land contract — that carries real advantages and real title risks.
- Down payment
- 20–35%
- Terms
- Shorter than a mortgage, higher rate
- Main lenders
- Michigan credit unions
- Local option
- Seller-financed land contract
How land & lot loans work
A land or lot loan finances vacant property with no home on it. Because there's no house to secure the debt, lenders treat it as higher risk.
- Down payment: expect 20-35% down
- Terms: shorter than a standard mortgage
- Rates: above a standard mortgage
- Easier to finance: improved lots with road and utility access, versus raw, unimproved acreage
The common Michigan alternative is a land contract, where the seller finances the purchase directly and holds legal title until you pay it off.
What's different in Michigan
Michigan credit unions — Lake Michigan Credit Union among them — are the main source of lot loans, and they lend most readily on improved, buildable parcels.
If you plan to build, a construction loan or a lot loan that rolls into one is usually cheaper than buying land and financing the build separately. Size the payment first with the land-loan calculator.
Land contracts remain widespread in rural and northern Michigan. They're a legitimate tool, but treat them like any financed purchase.
Requirements at a glance
- 20–35% down (less for improved, buildable lots)
- Strong credit; clear intended use (build vs hold)
- Survey and clear title on the parcel
- Shorter loan term than a standard mortgage
This guide is general information, not a lending decision. Loan limits and program rules change — verify current figures with a licensed Michigan lender and confirm licensing at NMLS Consumer Access. See all Michigan loan types or compare lenders.