Quicken Loans doesn’t finance tiny homes without a permanent foundation at this time.
There are lots of things to think about when building or buying a tiny house: zoning regulations, whether or not to certify it as an RV, how many square feet you can stand to live with, and if it should be mobile or on a foundation.
Throw in the possibility of having to move this dwelling in the future, and you may find yourself bogged down in the weeds, rather than enjoying the process of Pinterest-boarding your favorite tiny home interiors. We’ll go through the hurdles, so you can get to the fun.
Don’t Bank On It
The chances of finding a traditional mortgage lender for this type of home are lower than normal. Most lenders have minimum loan amounts that still exceed the average cost of a tiny house, and even if you decide to place your tiny home on a traditional foundation (i.e. not on wheels), some have minimum square footage restrictions as well. You can try to persuade your local credit union to furnish you with an RV loan, but there may be a hitch to that (pun intended).
The Recreation Vehicle Industry Association (RVIA) certifies homes to be road-worthy, meaning they fall under the guidelines of the U.S. Department of Transportation’s National Highway Traffic Safety Administration. These temporary living quarters must also comply with strict manufacturer codes.
While these codes can create unwieldy, expensive construction processes for a small shop, a few tiny home manufacturers, most notably, Tumbleweed Tiny Homes, build out RVIA-certified dwellings.
This allows you to apply for an RV loan through a variety of lenders like major banks, credit unions and online financiers. Both major banks and credit unions have longer loan periods of up to 20 years in some cases. Online vendors provide loans for up to 84 months, with rates typically between 4.5% – 7.5%. It’s a higher rate than a traditional mortgage, but saves you lots of upfront time.
Cash (or Credit)
According to The Tiny Life, approximately 68% of tiny home owners are mortgage-free, and with a house price range of anywhere from $20,000 – $100,000, the ideal financing option is cash.
If that’s not feasible, the only remaining option is through credit cards. Even with introductory rates, at some point you’re most likely going to be paying a steep interest rate, somewhere around 15.99% – 25.99%.
The tiny home construction community has flourished in recent years, and these specialized contractors are now located in nearly every state. There’s no lack of books, resources and even festivals to attend to determine the ideal look, size, toilet type (it’s a big debate), and contractor for your tiny home. The tiny home rabbit hole exists, and I don’t discourage you from falling into it.
You’re living in your tiny home, financed with the best case option for your circumstances – but a couple of years down the road, you decide you want to move, or your employer wants to relocate you. Well, you’re on wheels, so it shouldn’t matter, right?
Unfortunately, it does. If it’s a domestic move, the American Tiny Home Association has pulled together a state-by-state directory of tiny home rules and regulations. Every municipality, town and state can have different laws and codes. Essentially, there’s no national policy.
For instance, in most counties across the U.S., there are county building restrictions that say you must build homes over 1,000 sq. ft., unless there’s a building code variance like the one they have in Park County, CO.
If a scant amount of counties have regulated their laws for tiny homes, it’s unlikely your employer has set guidelines on moving your tiny home either domestically or internationally. Like most emerging industries, there’s uncertainty on how to regulate.
If you’ve decided to move or you’re faced with a relocation opportunity, there are options for your tiny home.
- If you have a mobile, RVIA-certified tiny home, your options domestically are better. You can advocate for temporary living quarters at a campground or RV park until you can find land or a backyard to accommodate your home.
- If you have a tiny home on a foundation, and thereby not RVIA-certified, the situation becomes more challenging:
- Is the place you’re moving to tiny-home friendly?
- Is there land on which to accommodate your move?
- If so, will your employer help you locate or find land?
- Is moving the house part of your relocation benefit package?
Technically, a tiny home on a foundation is considered in many communities as an Accessory Dwelling Unit (ADU), and can only be built if a primary home preexists on the land. Thus, there is the option of purchasing a home in your new community and applying for an ADU permit.
- Unless your home is a storage container, then moving a tiny home overseas might present your company with a quandary. They’ll need to determine cost and weight, whether the country you’re moving to has tiny home regulations, if there’s a place to plop down your home, or if you’re even eligible for that type of benefit.
- If your employer is unable to accommodate, then you may want to consider renting out your home while you’re taking on your overseas assignment. If it’s long term, you may want to either find storage for it or sell it.
While tiny home financing and moving can seem rife with complications, it’s no less complex than constructing a family dwelling. There are rules. There are compromises. And if you’re moving, there will always be stressors – but hopefully with these questions and tips, you’re armed with the right resources to finance construction and move your tiny dwelling.
Do you live in a tiny home? What’s your experience like? Let us know in the comments below!
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