Buying Land With Wetlands: How to Check, What It Costs You, and Financing

A 40 acre tract at a great price per acre can turn out to be 15 good acres and 25 acres of swamp. Wetlands are not always a deal killer, but they change what the land is worth and what you can do with it. Here is how to spot them before you sign.

What Counts as a Wetland?

A wetland is ground that is wet enough, often enough, to have wet soils and plants that grow in water.

Marshes, swamps, bogs, and wet bottomland are the obvious ones. Many wetlands are not obvious: a low field that stays soggy in spring, or a wooded area with standing water after rain. What makes them matter is regulation. Filling or draining a wetland generally needs a permit, so the wet part of a parcel is usually off limits for building.

How Do You Check a Parcel for Wetlands?

Screen it with free federal maps, look for the signs on the ground, and hire a consultant if the deal depends on it.

1. Check the Wetlands Mapper. The U.S. Fish and Wildlife Service Wetlands Mapper shows mapped wetlands. The agency says the map uses a biological definition and does not set the limits of any agency's regulatory reach, so treat it as a first look.
2. Check the soils. The USDA Web Soil Survey shows soil types, including wet soils, for the parcel.
3. Look at the land. Standing water, cattails and other water plants, water stained trees, and soggy ground are all signs.
4. Check the flood map too. Wet ground and flood zones often go together.
5. Get a professional answer when it matters. If your price depends on building in or near a wet area, hire a wetland consultant to delineate the wetland before your due diligence period ends.

Can You Build on Land With Wetlands?

Usually on the dry part. Filling a wetland generally needs a federal permit and often a state permit.

Under Section 404 of the Clean Water Act, putting fill into waters of the United States, which can include wetlands, needs a permit, usually from the U.S. Army Corps of Engineers. States can add their own rules. In practice, buyers build on the upland ground and leave the wetland alone. Wet ground can also rule out a septic drain field, so get a perc test on the building area.

What Do Wetlands Do to Land Value?

They usually lower it, because buyers pay for usable acres, not total acres.

Price the parcel on its dry, usable ground. A tract with a good building site and wetland at the back can sell fine, and some buyers, like duck hunters and conservation buyers, want wet ground. A tract that is mostly wetland has far fewer buyers. Divide the price by the usable acres, not the total acres, and see if the deal still works.

Do Lenders Lend on Land With Wetlands?

We do when the parcel is mostly dry, and we value it on the usable land.

Some wetland on a parcel is fine. Our valuation is based on the usable ground, so wetland acres lower it. We pass on parcels that are mostly wetland or flood zone, because they are too hard to resell. Our terms:

• $30,000 to $1,000,000, interest only, 14% on loans of $100,000 and up and 16% under $100,000, for 24 months
• Up to 65% of value (our own valuation, not an appraisal; closer to 50% of value in slower markets), never more than 80% of the price
• $600 closing fee, 2% exit fee at payoff, no points, no appraisal
• Business purpose loans to LLCs and corporations, on land of 2 acres or more

See how we value land without an appraisal and land loan requirements.