If you are buying land to build a retirement home, barndominium, or weekend place, here is the clear answer upfront: land and construction loans are a two part approval, and most surprises happen when buyers learn that too late. This is especially true for self employed buyers who assume strong cash flow alone solves everything.

Lenders look at two things at the same time. First is loan to value. Most banks want you about twenty percent into the total project, and that equity can come from cash or from land you already own free and clear. In the Texas Hill Country, I see buyers use land equity around Dripping Springs, Blanco, and Johnson City to cover the down payment entirely. Second is you as the borrower. That means tax returns, bank statements, business income, and debt to income ratios. Strong projects can stretch guidelines, but only if they are structured correctly from the start.

Timing matters more than people think. Talk to a lender before hiring an architect or builder so you know what you can realistically finance. Your final plans and budget are used to appraise the finished value of the home, and if those numbers do not line up, the loan stops cold. This is why your team matters. A lender who understands construction, an agent who knows raw land, and a builder familiar with Hill Country site conditions prevent expensive redesigns and delays.

The buyers who win start early, stay realistic, and coordinate everything instead of winging it. That approach protects cash flow and avoids painful mid project surprises.

If you want help structuring a land and construction loan or assembling the right team, visit https://chrispesek.com, email chris@drippingspringshometeam.com, or call 512-736-1703. Chris Pesek is a Texas Hill Country Realtor specializing in land, acreage, and custom homes. 383+ sales. Top 2 Percent Producer. 63 five-star reviews. Texas Hill Country, Central Texas, Dripping Springs TX, Blanco TX, Johnson City TX, land and construction loans, building on land Texas, custom home financing