Financing a “tiny home”

[Anonymous]

Hello all! 

I had a couple quick questions. My dw and I found a tiny home (covid made us reasses our values) the home is 400sq ft water front with a half acre of land at $55k. The property is fixed as it can't be moved and is on stilts to protect the house from

potential flooding. However, it is not in a flood plain. I would believe it would appraise out and the house is a new build with water/electric....etc and the land is valuable. would lenders like navy/chase/local credit union even consider a house like this? It cannot be moved and we are more interested in the land that just came on the market. 

we figured we would live in for the time being to save a lot of money off of our current rent prices and save for our dream house so we aren't stretched too thin when we do decide to pull the trigger in 2-4 years on a $500k+ house. Any thoughts on this?

we have pre approved for $300k but nothing we can find in that price point really screams forever home and forever area so we want to cut back expenses and save like crazy.

[amck12]

I would definitely ask a loan officer! I had a similar 'unusual' property that I looked at as well, and they can pretty much tell you right away if it would be a candidate for financing. Also consider lending places like 'country place' and whatnot, that specialize in rural properties.

[Anonymous]

Thank you for the advice! As I stated we were originally looking to purchase a year or two now in the $300kish range but just decided to try to cut our cost as much as possible since both our departments are fully remote going forward we have the ability to move away and not have to worry about a commute and cut our rent down by 75% with this property. I will definitely look there as well as various community banks in the county if the property. 

I guess the goal is to get this one and save a bunch to skip the middle house price of $300k and just save until we can get into a safe neighborhood and a forever home! 

[iced]

I think some lenders also have a minimum amount they'll offer mortgages on ($50,000 is the number I've heard). That's something each lender you talk to can tell you.

If you were close to having a down payment for a $300k place, you likely have most/all of the purchase price of this home in cash. You could put a substantial down payment and just go with a personal loan for the last little bit if mortgage lenders fall through.

[Anonymous]

@iced  we were at a 5% down payment option on the $300k house. Also the loan amount would be for $75k for the "tiny house" so we are off by about $40k in terms of a loan so a personal loan may not work. We are shopping around to see what we can get offered and who would finance this property. This will let us save up a lot and buy a $500k+ house in the near future and convert this property to a rental or something.

[iced]

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@Anonymous wrote:

@iced  we were at a 5% down payment option on the $300k house. Also the loan amount would be for $75k for the "tiny house" so we are off by about $40k in terms of a loan so a personal loan may not work. We are shopping around to see what we can get offered and who would finance this property. This will let us save up a lot and buy a $500k+ house in the near future and convert this property to a rental or something.

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If it's $75k, you might get away with a $25k down payment and $50k mortgage.

Is it listed for sale at $55k or $75k, and would it appraise at $75k if the latter? If the answer is no, that's also going to complicate things.

[Anonymous]

@iced our agent and I both agree it should appraise out. It is rural though so that's always tricky but it's a water front property with an area being developed in the near future (25 plots of land being develooed) with this being the first developed land. In addition it is a very air bnb and income generating property area. We would be living there as a primary residence so that doesn't impact us but other homes have appraised in that range with similar builds...etc.