Buying land in Arkansas can be exciting, but it often raises one big question: “How do I pay for it?” Unlike a standard mortgage, land loans work differently, with unique programs available depending on whether you’re purchasing farmland, recreational acreage, or a future homesite.
This guide explains the major land loan programs in Arkansas in 2025, what makes them different, and how buyers can choose the right financing option.
Why Land Loans Are Different from Mortgages
When you buy a home, lenders can lean on the property itself as collateral. Vacant or raw land doesn’t provide that same security. Because of this, Arkansas land loans usually come with:
- Higher interest rates than mortgages
- Larger down payments, sometimes 20–50%
- Shorter loan terms if the land is raw or undeveloped
Knowing these differences upfront helps you compare programs realistically.
Land Loan Programs Available in Arkansas
Arkansas Federal Credit Union – Lot and Land Loans
Local credit unions like Arkansas Federal make it easier to buy a parcel now and build later. Their programs typically feature:
- Balloon loans with 10–20 year terms
- Minimum down payment around 25%
- Credit score requirements starting near 620
These loans work best if you’re securing a lot before starting construction.
AgAmerica Rural Land Financing
For buyers focused on farmland, ranches, or large rural acreage, AgAmerica provides:
- Fixed-rate land loans up to 30 years
- Interest-only credit lines for flexibility
- Programs designed specifically for agricultural borrowers
This makes them a strong choice if you’re looking to finance agricultural property in Arkansas.
USDA Rural Housing Site Loans (Sections 523 & 524)
The USDA offers site development loans for nonprofits:
- Section 523 loans help groups support self-help housing.
- Section 524 loans finance housing lots for low- and moderate-income buyers.
These aren’t consumer loans but they play a big role in reducing costs for Arkansas housing developments.
USDA Farm Service Agency (FSA) Loans
Farmers and ranchers have access to several FSA programs:
- Beginning farmer and rancher loans with low entry requirements
- Farm ownership loans for buying or expanding property
- Microloans for smaller agricultural projects
For many new producers, these loans provide the most affordable path to ownership.
Recreational Land Financing
If your goal is to buy hunting land, fishing property, or a rural retreat, specialized lenders such as Hall & Hall offer:
- Up to 30-year amortization
- Competitive fixed rates
- Financing tailored for recreational use
These loans prioritize lifestyle properties over income-producing farms.
Private Land Loan Options
Private lenders can also finance land in Arkansas, often with faster approval and looser requirements. The trade-off is higher rates—sometimes 11–15%—and shorter repayment periods. They’re often used as a bridge until buyers qualify for traditional financing.
Comparing Loan Options
| Program | Best For | Typical Rate (2025) | Down Payment | Term Length |
|---|---|---|---|---|
| Arkansas Federal CU Lot Loans | Build-later flexibility | 7–9% | ~25% | 10–20 yrs |
| AgAmerica Rural Loans | Farmland & ranches | 6–8% | 20–30% | Up to 30 yrs |
| USDA 523/524 Site Loans | Nonprofit housing | ~3% | Varies | 5 yrs |
| USDA FSA Farm Loans | Farmers, beginners | 4–6% | 5–20% | Up to 30 yrs |
| Recreational Land Loans | Hunting & leisure land | 7–9% | 20–30% | Up to 30 yrs |
| Private Loans | Fast approvals | 11–15% | Flexible | 1–5 yrs |
Example Payment Scenarios
- A $60,000 Arkansas Federal balloon loan at 8% for 15 years → about $574/month until balloon payoff.
- A $60,000 AgAmerica loan at 7% for 20 years → about $465/month.
If you want to test your own numbers, you can explore scenarios using this Arkansas land loan calculator.
Tips for Arkansas Land Buyers
- Check if your property falls within a USDA-eligible rural zone.
- Explore FSA programs if you’re a beginning farmer.
- Consider balloon loans if you plan to build within a few years.
- Save for a higher down payment to strengthen your application.
- Compare terms across credit unions, farm lenders, and private lenders.
FAQs About Arkansas Land Loans
Do Arkansas land loans require a large down payment?
Yes. Most lenders expect at least 20–30%, and raw land may require up to 50%.
Can I finance hunting or recreational land?
Yes. Specialized lenders offer long-term financing for recreational properties.
Are there programs for first-time farmers?
The USDA FSA provides beginning farmer loans with lower interest and smaller down payments.
What’s the difference between raw land and lot loans?
Lot loans are designed for parcels with access to utilities and roads, while raw land financing is riskier and more expensive. You can model both with a raw land loan calculator.
Final Thoughts
Arkansas buyers have access to a variety of land loan programs—from local credit union balloon loans to USDA and FSA support for farmers. Recreational buyers and investors also have options, though terms and costs vary.
Tracey is the creator of LandLoansCalculator.com, a trusted resource for accurate and easy-to-use land loan calculators. With a strong focus on clarity and reliability, Tracey is dedicated to helping users understand land financing with confidence. Her goal is to simplify complex calculations so buyers, investors, and professionals can make informed decisions quickly and efficiently.