Your Ultimate Guide to Buying or Building a Barndominium
Your Ultimate Guide to Buying or Building a Barndominium
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Barndominium, build a barndo, barndominium financing, barndo appraisal, One-Time Construction loans, FHA barndominium loan, VA barndominium loan, USDA barndominium loan, custom barn home, open space custom home
Building Your Dream Barndominium:
A Complete Guide to Financing and Appraisals
So, You Want to Buy or Build a Barndominium?
Barndominiums, those stylish barn-like structures, have been gaining a lot of attention in recent years. Originally, they were simply barns converted into living spaces. However, they’ve become so popular that many people now want to build their own from scratch.
I hadn’t even heard of a barndominium until a client asked for help finding land to build one. My initial reaction was, “A what?” After a quick Google search, I became fascinated. Now, my husband and I are considering downsizing and are on the hunt for land ourselves. I’ve been gathering as much information as possible and wanted to share what I’ve learned in this article.
Financing Challenges
One of the biggest hurdles people face when building a barndominium is financing. Because these structures are relatively new, finding a traditional mortgage lender can be difficult. Some savvy individuals have started calling them "open space custom homes" to make the financing process smoother.
As long as you qualify for a home loan program and your barndominium meets the property requirements for your loan type in your area, lenders are willing to fund construction loans for these unique homes.
Appraisal Issues
Appraising a barndominium can be tricky. One major factor appraisers consider is comparable properties in the area. If there aren’t any similar properties nearby, determining the value of a barndominium becomes challenging. Fortunately, the comparable properties used in an appraisal don’t have to be other barndominiums, although having similar properties helps.
Considering Building Your Own Barndominium?
If you’re thinking about building a barndominium, you might be wondering if you need separate loans for the land, construction process, and the home itself. There are alternatives to the often expensive Conventional Construction-to-Perm loans. The Federal Housing Administration (FHA), the U.S. Department of Veterans Affairs (VA), and the United States Department of Agriculture (USDA) offer One-Time Construction (OTC) Loans. These loans can save you both time and money.
For more information about OTC loans, check out my detailed blog post on the subject here.
Building a barndominium can be an exciting journey with the right information and resources. Happy building!