Is Earthship Home Financing Impossible?
Earthship homes are a unique kind of home often built from recycled materials. This type of home is energy-efficient and disaster-resistant because the home’s walls are often below the grade of the site. Many homeowners find them an environmentally friendly option for living off-grid and for saving thousands each year with energy costs. But, even though some home buyers like the idea of an Earthship home, most lenders won’t approve mortgages because of problems in getting appraisals completed.
A lack of similar homes in the area makes the appraisal process difficult. Lenders only feel comfortable lending when an appraiser finds three comparable homes nearby that have sold in the last 12 months. The problem is that finding three recent Earthship home sales in the same area is nearly impossible.
For those looking to purchase or refinance energy-efficient homes, there are unique challenges with Earthship home financing. You might have great credit and a great job but still get turned down for a mortgage. If this sounds familiar, then you need creative Earthship home financing with HomePromise.
Why Lenders Deny Financing For Earthships
Beyond the comparable sales issue for completing the appraisal, another problem lenders face is the fear that unique homes like Earthships will be hard to sell. Most lenders get nervous thinking about a possible foreclosure on a unique home because of this “marketability” issue. Selling a home fast is important to keeping foreclosure costs for a lender to a minimum.
An Alternative Approach To Earthship Financing
If you want to buy or refinance a unique home like an Earthship, you’re probably going to be denied by most lenders, but don’t give up. It is possible to finance your energy-efficient dream home with HomePromise!
You can apply with your bank or credit union for help but most likely they won’t fund a mortgage for any kind of unique home for the reasons already mentioned above. If they do provide mortgages for unique homes, the interest rate will usually be higher and the mortgage will usually have an adjustable rate which runs the risk of higher monthly mortgage payments in the future.
Problems With Hard Money Lending
“Hard Money” lending is another option you can try. A Hard Money lender is a non-bank mortgage lender that can approve loans on unique properties. The problem with Hard Money lenders is that their interest rates are usually even higher than banks and credit unions. Plus, you need to watch out for the fine print buried in dozens of pages of mortgage documents. Hard Money lenders are notorious for non-standard mortgage documents that can trap you in a mortgage that will not be affordable for the long term. The fine print may include surprising features like a balloon payment meaning that the entire mortgage balance has to be paid off within just a few years after you get the loan.
Creative Financing With HomePromise Corporation
To sum up, most lenders will always be nervous about Earthship home lending because unique homes are by definition uncommon. But, HomePromise will look at creative ways to ensure you get the mortgage you need to buy or refinance the Earth Shelter, Earthship, Dome, Grain Silo, Berm, or Log Home of your dreams – and you can be confident that the mortgage you get won’t hurt you in the long run with rising payments. Plus, if you are an eligible active-duty military member or veteran, you may qualify for a zero-down payment Earthship home loan!
Apply For Financing
Getting approved for unique home financing is difficult. It doesn’t have to be. Because your dream home is unique, approval will require some creativity. We are here to help you. Call today at 800-720-0250.
“I just want to thank you very much for your work to help us refinance our loans. I know you had to do so much work for us and we really appreciate it. If I know anyone who wants to buy a home or refinance I will do my best to refer you to them. Again, thank you very much.”
“My mother recently had a refinance with HomePromise. The process was easy for her (and I) to follow. The loan representative, Chris Gaus was very helpful and responsive for the entire process and explained everything. I would definitely recommend this company.”