When land is found in its natural state, it is called raw land. This means that there have been no manmade improvements such as clearing, digging, grading, cleaning, filling and more.

Raw land loans are meant to facilitate the purchase of wholly undeveloped pieces of property. They do differ from vacant land loans on a number of points.

A Closer Look at Raw Land Loans

Raw land is generally defined as property that does not have any improvements on it whatsoever. This means it will not have such things as utility lines in place. It might not even have easy access to them. This type of land may not be reachable via paved roads, as well.

Obtaining financing for raw land can be quite difficult because the prospect is risky for lenders. Since borrowers will face a lot of work in developing the land, their stake may not be as high.

The Vacant Land Distinction

Vacant land loans are different in that they are meant to facilitate funding on properties that do have access to utilities or may already have improvements in place. Obtaining funding for vacant lots can still be a difficult process, but it is generally easier than dealing with the purchase of raw land.

When the desire to buy pristine property is in place, raw land loans might be required. Partially improved lots will generally be funded through vacant land loans.

 

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