Land development loans are financial products specifically designed to finance the preparation of land for construction or agricultural purposes. These loans are typically offered by banks, credit unions, or specialized lending institutions. Here are the key aspects of land development loans:

1. Purpose: Land development loans are used to fund various activities related to preparing raw land for construction or agricultural use. This includes clearing, grading, excavation, drainage, and infrastructure development such as roads, utilities, and landscaping.

2. Types of Projects: These loans can be used for residential, commercial, industrial, or agricultural land development projects. Residential projects might include subdivisions or housing developments, while commercial and industrial projects could involve preparing land for shopping centers, office buildings, or factories.

3. Loan Structure: Land development loans are typically structured as short-term loans, often with a repayment period ranging from one to three years. They may have variable interest rates and are often interest-only during the development phase, with the principal repaid in full at the end of the term or upon project completion.