What they probably meant is that you could not get a residential loan, because the fact that the land is income-producing most likely means that you need a commercial loan. A residential mortgage is restricted only to residences, not income-producing, investment, or commercial properties. You should still be able to get a loan, but it will be a different one, under different terms. Note that banks are *never* obligated to lend to anyone--banks are free to decide to whom to lend, under what terms, based on their underwriting criteria and risk assessments, as well as the availability of government support (e.g. Fannie and Freddie).