Mortgage Myth #23: “No, You Can’t Buy Land or Mixed-Use Property”
Think land and mixed-use properties are off-limits? The truth is, financing options exist that make these opportunities possible.
The Myth
“No, you can’t buy land or mixed-use property.”
The Truth
You absolutely can — with the right loan strategy. Financing land or mixed-use property isn’t always as straightforward as a traditional home loan, but programs exist to make it possible.
Why People Believe This
Most people are only familiar with standard mortgages that apply to single-family homes. Because land-only and mixed-use properties don’t fit neatly into that box, it’s easy to assume financing isn’t available.
Plus, many banks shy away from these loans, which makes buyers think it’s not possible anywhere.
Detailed Breakdown
- Land Loans: Options exist for buying land now and building later — including construction-to-permanent loans that finance both the land and the build in one package.
- USDA/VA Programs: In eligible areas, these can finance land plus construction with little to no money down.
- Mixed-Use Properties: If the residential portion is the majority (e.g., apartments over retail), these can sometimes be financed through conventional or FHA options. Otherwise, commercial or DSCR (Debt Service Coverage Ratio) programs may apply.
- Equity & Strategy: Some buyers use equity from an existing home or partner financing to make the deal work. It’s all about structuring it correctly.
Real-World Example
A recent client of mine assumed they couldn’t buy a small parcel of land just outside town. They wanted to build a forever home but figured they’d need cash for the land first. Instead, we set them up with a construction-to-perm loan that rolled the land and construction costs together. They’re now breaking ground on their dream home — without draining their savings.
The Bottom Line
Don’t let this myth keep you from exploring options. Land and mixed-use properties are within reach — you just need a mortgage strategy that matches your vision.
Contact Me
Thinking about land, mixed-use, or a build project? Contact me and let’s design a financing plan that makes it happen. source.
