Why it works so well mechanically
A cash offer is stronger than a financed one, closes faster, and avoids the appraisal problems that stall rural land deals. Drawing on a HELOC makes you a cash buyer. The rate is lower because your house is better collateral than raw ground, and the underwriting is simpler because the lender is looking at equity it already understands.
For someone with substantial home equity and a clear plan for the land, this is genuinely the cheapest route available. That is not in dispute.
What the trade actually is
Collateral substitution. A land loan is secured by the land: default and the lender takes the parcel, which is a bad outcome you can survive. A HELOC is secured by your residence: the same default now threatens the house.
That reframing matters because land is illiquid in a way houses are not. If circumstances change and you need to unwind, selling raw acreage can take months or longer, and it may sell for less than you paid. Meanwhile the HELOC payment is due monthly against the roof over your head.
When it is a reasonable decision
When you intend to build promptly and will refinance into a construction or permanent loan that repays the line. When the draw is small relative to your equity and your income services it comfortably without the land ever producing anything. When you have a genuine exit — a buyer, a build plan, a use — rather than a hope that values rise.
When it is not: when the draw maxes the line, when the plan depends on selling the land at a profit, or when the parcel has unresolved problems. A parcel with questionable access or a failed perc test may be hard to sell at any price, and that is the scenario where the house is genuinely at risk.
The discipline that makes it safe
Screen the parcel harder than a lender would, because no lender is screening it for you — that is the hidden cost of borrowing against your house instead. Run the risk scorecard, verify access in recorded documents, confirm zoning permits your intended use, and get the survey.
Then size the draw so that a total loss on the land would be painful rather than catastrophic. If the honest answer is that losing the parcel would cost you the house, the draw is too large regardless of how good the parcel looks.