Buy Now, Build Later

Key Takeaways: 

• Buying land now, then financing home construction later, can be a smart strategy. 
• Before purchasing land, make sure to check out local zoning restrictions, any exemptions the land currently holds, and utilities access. Some areas may have rules about what type of home you can build on the land.
• A land loan can help finance your acreage purchase. Check with your lender to understand any requirements that come with that loan, like a timeline for beginning home construction.  

This content has been updated as of March 2026.

Are you dreaming of owning your own piece of land in Texas… but not quite ready to build your dream home yet? 

Buying land now to build a home on later is a great way to work towards your rural living dream. 

This strategy helps you secure the acres you want, then save money toward home construction in the future. Here’s how to make the most of your “buy now, build later” plan.

What to know about buying land in Texas

Before buying land, it’s important to consider several factors that can influence your eventual home-building process.

Choose the right acres 

If you’re going to build your dream home, you want it to be in an area of the state you love. Before signing a land deed, make sure it’s somewhere you’d want to live. 

It’s also important to set a budget for how much you can spend on land. Research which regions in Texas can offer those prices. You can check out our most recent land pricing guide to see where in Texas might match your budget.

Research zoning restrictions 

You’ll need to ensure the land you purchase is zoned for residential use and that you can get the necessary permits to build the type of home or structure you have in mind. 

Whether you want to build a classic two-story brick house, or construct a barndominium, certain areas may restrict what kind of home you can build. It’s better to know this up front before you sign your land loan, rather than after you’ve already drawn up the building blueprints.

You’ll also want to review your land deed for things like minimum square footage requirements or allowable external materials.

Ensure utility access 

Another important consideration is the condition of the land itself. You’ll need to make sure the land is suitable for building and has proper access to utilities such as water and electricity. It’s always a good idea to have the land inspected by a professional to identify any potential issues that may arise during the building process. 

Don’t forget about tax exemptions

Before buying land, check whether the acres currently have an ag or wildlife exemption. If they do, make sure you understand the requirements to maintain that specific exemption. This could mean conservation commitments or a continuation of agricultural use. 

The good news is, even if buying exempt land can sometimes bring on extra requirements, those exemptions will help you save money on your tax bill.

Build a proactive plan

Finally, it’s important to have a solid plan in place for the home building process. You’ll need to have a clear timeline for starting and completing construction, as well as a budget for all associated costs. 

How to finance a land loan if you plan to build a house later

Financing an initial land purchase, then working out a construction loan later, is a common practice that many folks take advantage of now. Buying land first differs from buying a property that already has a house on it. Make sure to work with experts who have experience with this type of financing.

Typically, a lender will offer what’s called a land loan for the purchase of raw, undeveloped land. Lender requirements can vary. Some require construction to be started within one year of closing. Texas Farm Credit typically suggests five years. 

To qualify for a land loan, you’ll also probably need to have a down payment of at least 15 to 20% and a solid credit history. The interest rates on land loans can be higher than the traditional home mortgages you’re used to. 

Buy now, build later: Tap into expert help to finance your dream home

Remember, building a home or farm can be expensive. It’s important to have a realistic understanding of what you can afford. Do your research, have a solid plan in place, and work with a trusted lender like Texas Farm Credit to ensure you’re making the right financial decisions for your future. 

Whether you want to make a land purchase, or you’re ready to take out a construction loan to start building your family’s dream home, we have the financing tools to help. Call us today for more information and to get started.