Thinking about buying land in Llano County but unsure how to finance it? You are not alone. Land loans work differently than home mortgages, and the details can affect your budget, timeline, and plans for the property. In this guide, you will learn the main loan types, typical terms and down payments, local Lake LBJ considerations, how appraisals and surveys work, and the step-by-step process to closing. Let’s dive in.
Land loans vs. home mortgages
Financing vacant land is not the same as financing a house. Because land does not produce income and can be harder to resell, lenders take a more conservative approach. That usually means higher down payments, shorter terms, and more documentation.
In Llano County, you will see several lender categories:
- Local and regional banks and credit unions that make lot or land loans.
- Farm Credit associations and other agricultural lenders if you plan to farm or ranch.
- USDA Farm Service Agency programs for eligible farmers and ranchers.
- Private or hard-money lenders for short-term, higher-cost options.
- Owner or seller financing with negotiated terms when traditional financing does not fit.
Understanding where your property fits helps you narrow the right lender and product.
Common land loan types
Improved lot loans
These are lots with utilities, legal access, and often a permitted septic and water source. Lenders view improved lots as lower risk, so down payments are typically lower than raw land. If you plan to build soon, this can be a strong option.
Raw land loans
Raw land has limited or no utilities, no septic or well, and may lack developed access. Lenders treat raw land as higher risk. Expect larger down payments and terms that may include interest-only periods or a balloon payment.
Acreage and agricultural loans
For larger tracts, lenders focus on the intended use and the land’s potential to produce income or be subdivided. Agricultural lenders may offer favorable terms for working ranches or farms. Underwriting varies widely depending on size, productivity, and your plans.
Construction or combined lot plus construction loans
If you plan to build soon after purchase, some lenders bundle the lot and construction into one loan with draws during the build. Underwriting is more detailed, and you will track milestones as construction advances.
Owner financing and private notes
Owner financing can fill gaps when traditional lenders are not a fit. You and the seller agree on the down payment, rate, and amortization. This is common on unique or very rural parcels, or when timing is critical.
Typical terms and what to expect
While every lender is different, these patterns are common in Llano County:
- Down payments:
- Improved lots: 20 to 30 percent down is common.
- Raw land: 30 to 50 percent down is typical, sometimes higher for very rural or no-access parcels.
- Agricultural programs may allow lower down payments for qualified borrowers.
- Loan-to-value: Typically 50 to 80 percent, lower than a home mortgage.
- Interest rates: Land-loan rates are usually higher than comparable home mortgage rates due to risk. Private or hard-money loans charge significantly higher rates and fees but can fund faster.
- Amortization and term: Many land loans run 5 to 15 years, sometimes with a balloon at the end. Interest-only periods are more common on raw land.
- Fees and requirements: Most lenders will require a current boundary survey, title insurance, a land appraisal, and evidence of legal access. If the property lies in a FEMA Special Flood Hazard Area and the lender participates in flood requirements, flood insurance will be required.
What lenders look for
Lenders focus on how usable and marketable the land is today and in the near future. Expect questions about:
- Access: Public road vs. private easement, and any road maintenance agreements.
- Utilities: Electric, phone or internet, water source, and septic.
- Topography and soils: Buildable area and any limitations.
- Floodplain or drainage: FEMA mapping and site-level risks.
- Zoning or restrictions: HOA rules, county requirements, and shoreline rules near Lake LBJ.
- Future use: Potential to subdivide or produce income.
- Title and minerals: Clear title and whether mineral rights are included or severed.
If you plan to subdivide or develop, many lenders will ask for a basic plan and timing, and may want evidence of entitlements or marketability.
Appraisals, surveys, and title
Appraisals
A land appraisal evaluates market value based on comparable sales, highest-and-best use, access, utilities, topography, and any restrictions. For Lake LBJ parcels, appraisers also consider water access, view, dock potential, shoreline configuration, and any lake authority rules that affect use. Appraisals in Llano County typically take 1 to 3 weeks after the order, longer if comparable sales are scarce.
Surveys
Most lenders require a recent certified boundary survey and updated legal description. Surveys identify boundaries, easements, and potential encroachments. In Llano County, a survey can take 2 to 6 weeks, depending on size, terrain, and surveyor workload. Ordering the survey early often keeps your transaction on schedule.
Title and mineral rights
Title insurance and a title search are standard. In Texas, mineral rights are frequently severed from surface rights, which can influence value and use. Ask the title company to confirm recorded easements, rights-of-way, restrictive covenants, and any shoreline or drainage restrictions relevant to your plans.
Llano County and Lake LBJ specifics
Lake LBJ and local rules
Lake LBJ is part of the Highland Lakes system and is managed by the local river authority. Shoreline rules, dock permits, and boat-launch restrictions may apply. If buying a lakefront or lake-adjacent tract, confirm what is allowed before you finalize your offer and share those details with your lender and appraiser.
Floodplain and insurance
Use FEMA flood maps to identify Special Flood Hazard Areas. Lakeshore and creek-adjacent tracts can be affected by fluctuating water levels or mapped floodplains. If your parcel is in a mapped flood zone and your lender requires it, flood insurance will be part of your costs.
Utilities, septic, and wells
Many rural properties rely on private wells and on-site sewage facilities. Verify whether a permitted septic exists or if a soil suitability test is needed, plus well depth and yield history if a well is present. County offices or authorized agents handle onsite sewage and well-related rules that can affect buildability and cost.
Access and roads
Lenders require evidence of legal access by public road or recorded easement. Private or unimproved roads can complicate underwriting and insurance and may require a recorded maintenance agreement.
Subdivision and platting
If you plan to subdivide, confirm county rules for minimum lot sizes, septic setbacks, road frontage, and platting. These processes can add time and cost, so discuss them early with your lender and title company.
Property taxes and agricultural valuation
The Llano County Appraisal District administers tax valuations and exemptions. Texas offers agricultural or open-space valuations, often called 1-d-1, that can reduce taxes when land meets active agriculture criteria. Rules and thresholds are county specific, so verify requirements for your intended use.
Leases and surface use
Check whether the property is subject to mineral, hunting, or conservation leases that affect access or use. Your title commitment should list recorded leases and any associated surface restrictions.
Step-by-step timeline to closing
Here is a realistic timeline for a land purchase with financing in Llano County:
- Pre-shopping, 1 to 7 days
- Talk to lenders about product fit and down payment needs. Get pre-qualified so you can move quickly on a good tract.
- Offer and contract, 1 to 14 days
- Negotiate the contract with financing, survey, title, and inspection contingencies. Aim for 30 to 60 days to close, sometimes longer for land.
- Underwriting and due diligence, 3 to 8 weeks or more
- The lender orders the appraisal and requires the survey and title commitment. If needed, schedule soils testing for septic. Appraisals usually take 1 to 3 weeks and surveys 2 to 6 weeks.
- Closing, 1 to 2 weeks after approval
- Title company clears conditions, funds are wired, and the deed records.
- Post-closing, ongoing
- If developing, apply for building, septic, or well permits, and any shoreline or dock approvals for Lake LBJ.
Delays often come from slow surveys, limited comparable sales for appraisals, title issues, or added testing and permits. Start early on the items most likely to gate your closing.
Due diligence checklist
Use this list to protect your budget and timeline:
- Confirm legal access and any road maintenance agreement.
- Order a recent staked boundary survey and review for encroachments.
- Obtain a title commitment and review easements, restrictions, mineral reservations, and liens.
- Ask the lender about their appraisal approach for your parcel type.
- Check FEMA flood status and whether flood insurance will be required.
- Verify utility availability and options for electric, internet, and propane.
- Schedule a septic site evaluation or soil report if you plan to build.
- For Lake LBJ tracts, confirm shoreline access and dock or pier permit rules.
- Review county processes for wells, septic, and any building permits.
- Research property taxes, 1-d-1 agricultural valuation eligibility, and recent tax history.
- Confirm mineral rights status and any active leases.
- If subdividing, meet with county staff about platting, frontage, and infrastructure requirements.
Smart questions to ask lenders
When you compare lenders, ask:
- Do you make land loans in Llano County, and for which parcel types?
- What down payment and maximum loan-to-value will you require for this property?
- Do you offer fully amortizing terms, interest-only periods, or a balloon at maturity? What term lengths are typical?
- Which documents do you require, such as survey, appraisal, soils or septic reports, and proof of access?
- Will you allow any portion of seller financing or a bridge note?
- Do you require flood insurance for lake-adjacent parcels not mapped in a flood zone?
- How will the appraisal address a lake-adjacent lot or a large acreage tract with limited comparables?
- What are your fees, including origination, appraisal, survey, and title, and do you have a prepayment penalty?
- How long will underwriting take and what Llano County issues most often cause delays?
Investor and builder considerations
If you plan to subdivide or develop, many lenders will evaluate how many lots you intend, whether infrastructure must be complete before financing, and what marketing or pre-sales you expect. Provide a straightforward plan and timeline.
For income-producing acreage, agricultural lenders may consider productivity such as grazing, hay, or timber, and may weigh historical income records. Share accurate data to help your underwriting.
How a local advisor adds value
A successful land purchase in Llano County comes down to early planning, the right lender match, and clean due diligence. You also want a partner who understands Lake LBJ rules, surveys and access, mineral and water issues, and county processes for septic and wells. That combination helps you set realistic timelines, avoid surprises, and negotiate from a position of strength.
If you are comparing tracts or planning your financing, connect with a Hill Country brokerage that pairs deep local knowledge with specialist ranch expertise. When you are ready to explore options or line up resources, reach out to Fredericksburg Realty. Explore Listings & Private Ranch Opportunities.
FAQs
What is a land loan in Llano County and how is it different from a mortgage?
- Land loans usually require higher down payments, shorter terms, and more due diligence than home mortgages because vacant land is harder to resell and produces no income.
How much down payment should I expect for raw land in Llano County?
- Raw land commonly requires 30 to 50 percent down, with higher amounts possible for very rural parcels or those without legal access.
How long does it take to close a land loan in Llano County?
- Plan for 30 to 60 days to close, with lender underwriting and due diligence taking 3 to 8 weeks or more, depending on appraisal and survey timelines.
Do I need flood insurance if I buy near Lake LBJ?
- If your property is in a FEMA Special Flood Hazard Area and your lender requires it, flood insurance will be needed; verify your specific mapping and lender policy.
What documents do lenders usually require for land loans?
- Expect a current boundary survey, title insurance and commitment, a land appraisal, and proof of legal access; soils or septic reports may also be requested.
Are mineral rights typically included when buying Texas land?
- In Texas, mineral rights are often severed from surface rights; review the title commitment to confirm what conveys and what restrictions apply.
Can owner financing help me buy land in Llano County?
- Yes, owner financing and private notes are common when traditional financing does not fit, with terms negotiated directly between buyer and seller.
What should I check before planning a dock on Lake LBJ?
- Confirm shoreline rules and permit requirements with the lake authority and county, since these can affect dock construction and allowed uses.
