"Is this a minor or a major?" is the first question I ask when a borrower sends me a subdivide. The answer tells me how long the county will take, how much the split will cost, and how much I can lend at closing.
Here is the difference in plain words, and why it matters so much to your deal.
What is the difference between a minor and a major subdivision?
A minor subdivision creates a few lots with no new road. A major subdivision creates more lots or needs new roads and utilities.
Most counties call a split minor when it creates a small number of lots, often four or fewer, on an existing road. Anything bigger, or anything that needs a new road, is usually a major subdivision. Minor splits are often approved by planning staff. Major ones go to the planning commission and sometimes a public hearing.
| Minor subdivision | Major subdivision | |
|---|---|---|
| Typical lot count | Often 4 or fewer | Often 5 or more |
| New roads | No, lots front an existing road | Often yes |
| Who approves | Often planning staff | Planning commission, sometimes a public hearing |
| Plats | Often one plat or survey | Preliminary plat, then final plat |
| Typical timeline | About 6 to 10 weeks once submitted | About 4 to 12 months |
Timelines are ranges from Platineer's guide to the platting process. Your county will have its own.
Buying land to subdivide?
Subdivision loans from $30K to $1M, up to 80% of price when the plat records at closing, partial releases as lots sell. Written quote in 24 hours.
Get a Free QuoteSubdivision LoansHow many lots can you create in a minor subdivision?
It depends on the county. Four or fewer is common, but some counties draw the line at two or three.
There is no national rule. Every county or township writes its own subdivision ordinance, and the cutoff for a minor split can be two, three, four, or more lots. Some places also limit how often you can split the same parent parcel. Before you buy, read the ordinance or call the planning office and ask.
The names change too. Washington calls a small split a short plat. Michigan uses land divisions. More on that in land split vs. subdivision. For state by state exemptions, see subdivision rules by state.
Takeaway: never assume a split is minor. Get the answer from the county in writing.
Why do most land investors stick to minor subdivisions?
They are faster, cheaper, and you do not have to build a road.
A minor split on an existing road skips the most expensive and slowest parts of development. No road, no new utilities, and often no planning commission hearing. You pay for a survey, perc tests, and the county fees. That keeps your cost low and your timeline inside a 2 year loan, which matters more than most people think.
For the real numbers, see how much it costs to subdivide land.
In my experience, the best subdivides are simple. Big parcel, existing road frontage, a few lots, and a county that approves minor splits at the staff level.
How does a minor or major subdivision change my loan?
A minor split can often record by closing, which gets you up to 80%. A major one usually gets 65% at closing plus 15% later.
Our subdivide loan pays up to 80% of the purchase price if the plat records at closing and every lot passes perc. A minor split can often be done during your due diligence period. A major subdivision takes months, so it usually closes at 65%, with another 15% advanced when the plat records.
| Plat records at closing | Plat records after closing | |
|---|---|---|
| Loan at closing | Up to 80% of price | 65% of price |
| Later advance | None needed | Another 15% when the plat records |
| Down payment | 20% | 35% until the plat records |
| Perc tests | Every lot shows a conventional system | Test every lot before you close |
| Value cap | Loan never more than 65% of our conservative value | |
One more thing. We fund the land purchase only. Roads, utilities, and engineering for a major subdivision are yours to cover. Full terms are on the subdivision loan page.
What should I check before buying land to subdivide?
The ordinance, the road frontage, access, and whether every lot will perc.
Before you sign, find out what the county calls a minor split, how much frontage each lot needs, whether every lot has legal access, and whether the soil will take a conventional septic system on every lot. If any answer is no, the lot count drops, and so does your profit and your loan.
- Read the subdivision and zoning ordinance, or call the planning office
- Confirm minimum lot size and road frontage
- Confirm legal access for every lot
- Order perc tests on every planned lot
- Pull sold comps for lots the size you plan to create
See how lenders value a subdivide loan for how we look at those comps.
Want to know how much we would lend on your split?
Get a Free Quote →Frequently Asked Questions
What is a minor subdivision?
A split that creates a small number of lots, often four or fewer, on an existing road with no new infrastructure. The exact definition is set by each county or township.
What is a major subdivision?
A subdivision with more lots than the minor limit, or one that needs new roads or utilities. It usually needs a preliminary plat, a final plat, and planning commission approval.
How long does a minor subdivision take?
Often about 6 to 10 weeks once submitted, depending on the county. A major subdivision often takes 4 to 12 months.
Can I get a loan on land I plan to subdivide?
Yes. Damen Capital lends up to 80% of the purchase price if the plat records at closing, or 65% at closing plus 15% when the plat records.
Does Damen Capital fund roads for a major subdivision?
No. We fund the land purchase only. Roads, utilities, and engineering costs are the borrower's.
Related Reading
- Subdivision loans: buy land, split it, sell the lots →
- How lenders value a subdivide loan →
- Land split vs. subdivision →
- How long plat approval and recording take →
- Why you perc test every lot before you subdivide →
- How partial lien releases work on land loans →
- How much it costs to subdivide land →
- Recreational land subdivide loans →