Where can you get financing for a log home?
We were all ready to build our dream home when we found out that our bank won't finance a "log" home. This is our local bank where we do all our banking/financial matters. They said something I don't understand about companies they go through won't finance such construction. What's the difference in stick built and log built? OK, that is two questions!
Our builder is Amish. He is the best in the area, so I'm sure there is no financing with him... Thanks to the first lengthy answer, very helpful!
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Answer by CJKatl
Log homes are "unique properties" when it comes to getting a mortgage. Many lenders - especially in today's tightened lending environment - will no longer do loans on unique properties. But most large lenders are still doing these loans under certain parameters.
It appears your bank has a correspondent lending relationship with larger lenders. The larger lenders are less likely to do these loans through the correspondent channels, but more likely to do these loans through their own direct, retail channels.
Your appraisal will need to show that there is a market for this type of unique property in your area. This means at least three other log homes sold in the area in the past year.
However, it appears you are looking for construction financing. This is going to be more difficult. Since there is a glut of new homes on the market, lenders are being much more careful lending for construction.
Contact the large, major lenders. (SunTrust, Chase, CitiMortgage, BoA, et al). Ask what the present guidelines are for getting a loan on a unique property. These lenders are more likely to be doing these loans in house.
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