Buying rural property isn’t like buying a house in town. You’re dealing with land, wells, sometimes off-grid utilities, and unknown infrastructure. Traditional lenders often don’t want to touch it, especially if there’s no home or septic system on the property yet.
Here’s a breakdown of real-world financing options that work in places like Westcliffe:
1. Cash is King
Let’s be honest: most rural land deals are cash. If you’ve got it, use it. Sellers prefer it, deals close faster, and you avoid the hassle of paperwork and bank delays.
Pros:
- Strong negotiation power
- No interest or lender fees
- Faster closing
Cons:
- Ties up your liquidity
- Might not be an option for larger parcels or builds
2. Land Loans (Raw Land or Lot Loans)
If you’re not building right away, you’ll need a land loan. Not all banks offer these, and the terms are stricter than a regular mortgage.
What to expect:
- 25–35% down payment
- Shorter loan terms (5–15 years)
- Higher interest rates
- You’ll likely need a solid credit score and income
Pro tip: Look at local banks or credit unions in Colorado. They know rural land and are more flexible than big national lenders. Contact me for a list of local lenders that provide land loans in our area 719-494-4617
3. Construction Loans
If your goal is to build, you can finance the land and the home build together with a construction-to-permanent loan.
How it works:
- You’ll submit plans, builder info, and costs up front.
- The bank releases funds in stages during construction.
- Once the home is finished, the loan converts to a traditional mortgage.
Downsides:
- More paperwork
- Longer timeline
- Builder must be licensed and approved by the bank
4. Owner Financing
Some sellers are willing to finance the deal themselves. It’s more common on raw land or properties that banks avoid.
Benefits:
- Lower down payments in some cases
- Flexible terms
- Fewer hoops to jump through
Watch out for:
- Higher interest rates
- Balloon payments
- Always get everything in writing, reviewed by a real estate attorney
5. USDA Rural Development Loans (only if there’s a home)
If the property already has a home on it and qualifies as “rural,” you may be eligible for a USDA loan—these are government-backed, low- or no-down-payment loans.
Rules:
- Only applies to primary residences (no cabins or vacation homes)
- Household income limits apply
- The home must be move-in ready
Bottom Line
Financing rural property in Colorado is totally doable—you just need the right lender and a realistic plan. If you’re working with an experienced local agent who knows which banks will work with rural deals, your chances of success go way up.
Need lender recommendations or want to know what’s realistic based on your situation? Reach out—I’ve helped dozens of buyers get it done in Westcliffe.