# I own land. Can I build a house using a home equity loan?

**URL:** <https://boards.straightdope.com/t/i-own-land-can-i-build-a-house-using-a-home-equity-loan/200602>\
**Category:** Factual Questions\
**Created:** [September 9, 2003, 8:35pm UTC](https://boards.straightdope.com/t/i-own-land-can-i-build-a-house-using-a-home-equity-loan/200602 "2003-09-09T20:35:48Z")\
**Posts on this page:** 2\
**Page:** 1

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**Author:** ![toadspittle](https://avatars.discourse-cdn.com/v4/letter/t/c0e974/32.png) [@toadspittle](https://boards.straightdope.com/u/toadspittle)\
**Post date:** [September 9, 2003, 8:35pm UTC](https://boards.straightdope.com/t/i-own-land-can-i-build-a-house-using-a-home-equity-loan/200602/1 "2003-09-09T20:35:48Z")

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So, I own a piece of property whose assessed value has about doubled since I bought it 1.5 yrs. ago.

My credit history is such that while I easily qualify for a conventional mortgage (i.e., an existing home), I’m having trouble finding a construction loan (to build a new home).

I have some savings and am thinking of building a modest cabin on my property, doing most of the labor myself. Would it be possible to take out a home equity loan/home improvement loan based on the appraised value of my property (which, again, has no structure on it yet), and use that to help finance the construction of my house?

Or do lenders only lend against buildings, not lots?

Or would I likely not qualify for a home equity loan? (It seems to me that lenders are still falling over themselves to sell home equity loans and conventional mortgages, so I might have a better shot … whereas no one–at least in my area of the country–seems too interested in construction loans.)

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**Author:** ![mack](https://avatars.discourse-cdn.com/v4/letter/m/b19c9b/32.png) [@mack](https://boards.straightdope.com/u/mack)\
**Post date:** [September 9, 2003, 10:02pm UTC](https://boards.straightdope.com/t/i-own-land-can-i-build-a-house-using-a-home-equity-loan/200602/2 "2003-09-09T22:02:48Z")

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I don’t know what state you’re in, but [M&T Mortgage](http://www.systembuilt.com/) has a “system built” division for construction loans. I used them for our log home and it worked out well. The payouts are all tied to project milestones ($10,000 when the foundation’s done and inspected, $15,000 when the roof is up and windows are in, etc.), though. I don’t know if that’s what you’re looking for, exactly.

I don’t see why you wouldn’t be able to put your land up for collateral for some kind of secured loan or line of credit.