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: expect 20–35% down, shorter terms, and rates above a standard mortgage. Improved lots with road and utility access finance more easily than 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. It can open doors when bank financing is tough, but the buyer doesn't get clear title up front — so recording the contract and understanding forfeiture rules matters.
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.
Land contracts remain widespread in rural and northern Michigan. They're a legitimate tool, but treat them like any financed purchase: record the contract with the county register of deeds and have the title checked before you sign.
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
Frequently asked questions
How do land loans work in Michigan?
A lender finances vacant land with 20–35% down, a shorter term, and a rate above a standard mortgage, since there's no home securing the debt. Improved, buildable lots qualify more easily than raw acreage. Michigan credit unions are the main source, and a lot loan can sometimes roll into a construction loan when you build.
What is a land contract in Michigan?
A seller-financed purchase where the seller holds legal title until you finish paying. It's a common Michigan path when bank financing is hard to get, but you don't receive clear title up front — so record the contract with the county and understand the forfeiture terms before signing.
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.