Page 11 - Sonoma County Gazette - January 2018

What about a tiny home?
People ask me all the time about buying a piece of land and building a tiny home or something o the grid or some other wonderful idea that mostly I can’t help them with. I spend a good deal of these conversations guring out exactly what the person has in mind so I can determine whether I can help steer them in the right direction.
As a jumping o place, let’s start by looking at land loans to place the tiny home on. Land loans typically require 20% to 40% down payment and have much shorter terms than home loans. Construction loans are more readily avail- able, and you can get them for 10% to 30% down payment but banks like to nance more traditional homes with construction loans.
When you are talking about a tiny home, this is a completely di erent catego- ry as it is usually not on a permanent foundation and many times it is quite mo- bile and actually built on a platform on wheels. It does not really t in with car nancing because it is not registered with DMV like a trailer or mobile home.
It does not t with real estate nancing because it does not have a permanent foundation.
I have recently spoken with Efrain Monico at North Bay Credit Union and they do things a little di erently over there and could quite possibly help you with a tiny home nancing project. They are happy to do agricultural loans and land loans and construction loans and they nance mobile homes in parks. A park mobile home is the closest thing to a tiny home and may just be a solution for some people interested in tiny living. Efrain told me that they would be able to look at speci c projects on a case by case basis. If you call, tell him Hans sent you.
A lot of people I speak to about tiny homes are either having one built for them by a specialist or they are building one on their own. The rule book is be- ing written and developed on these type of homes as we go along. When you look at a manufactured home or a modular home or a mobile home, they have HUD (Housing & Urban Development) approved specs and plans and are stamped and approved by HUD but tiny homes do not have these standards, so they do not t in the box.
I honestly believe that the best way to make a tiny home work for you is to nd a plot of land that you acquire or share with friends or family and then build it with your own money. This will allow you to not t in the box and have complete and total creative freedom over your project.
As I said when I started, as a mortgage banker, I can’t help with the vast majority of these requests and many times I do not even have a good place to refer them for nancing... BUT I love to have these conversations because most of the people thinking about moving in this direction are extremely creative and interesting and the more I discuss it, the more I have to o er the next person. Each situation is di erent and I have found some creative solutions so don’t be afraid to ask.
Need to know more? Please send me your real estate and mortgage related questions. I am happy to answer you and it may become the topic of a future article.
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