Most lenders are actually very conservative. When they lend on properties, they usually like to lend on properties that look like other properties on which they've lent. If you're looking to buy a non-conventional home like a log home or geodesic dome, you're probably going to have to look harder to find a lender, but it's not impossible.
The Power of Comps
One key to getting a loan is to be able to demonstrate to your lender that your non-conventional home has a value that can be relied on. When your area has a large number of similar homes changing hands, you can point to those sales of comparable properties as proof that a market exists and that it's predictable. For some lenders, that's enough to make you the loan.
Regardless of the type of your non-conventional house, there are going to be some lenders uncomfortable with it simply because it's not a normal house. On the other hand, other lenders will look at the market and look at you and not worry as much about your house's non-conventional nature. Shopping around won't just find you a loan. It may also find you a lender comfortable enough with your type of home to lend to you without charging an unreasonable premium.
New Construction Financing
When you're looking to finance new construction of a non-traditional home, you may need to split it up. Many banks will lend on construction lots, especially if they are developed. With lot financing, part of your challenge is taken care of. If you can't get a construction loan from a lender, you might be able to get the manufacturer of the home to finance the materials, the construction or both. Doing this helps it sell the home and can help you get it built. If your home company doesn't provide its own financing, it may be able to connect you to a lender that will.
If you can't find a mortgage for your non-conventional home, you may still be able to finance it. One option is to take out a home equity line on an existing house and use it to pay for construction. Another option is to take out a private loan, although this loan will be more expensive. You may also be able to borrow against your 401(k). When you borrow against a 401(k) to buy or build a house, the five-year payback requirement doesn't apply either.
- Ablestock.com/AbleStock.com/Getty Images