Homes built from shipping containers are becoming increasingly popular, and that should make it easier to obtain a conventional home loan for one. It should anyway, but that’s not always the case.
In the late 1990’s it was often a challenge to secure financing on a log or dome house, anything “off the grid”, and in many cases modular or prefab (short for prefabricated) housing was also a difficult property to underwrite. However, due to increasing popularity and a greater degree of comfort on the part of banks and their underwriters, there are a great number of options available to borrowers. I suspect the same will hold true for container housing as well.
The initial funding question that needs to be address is “how will you fund the construction?” Lenders typically don’t disburse money on properties that aren’t built yet, so you’ll need to investigate what options are available to you:
Addressing how to finance the construction phase is the first hurdle, but this is typical for any convention or nonconventional new home construction.
After speaking with several mortgage professionals that lend nationwide in the United States, the general consensus comes down to the following factors:
It’s important to note that just because you feel that you are able to meet all of the criteria; it’s up to the final judgement of the underwriter. From my experience, it’s always best to approach mortgage underwriters with a “how can I make you comfortable with this property?”, as opposed to an adversarial and argumentative approach.
Finding a bank to lend on a home built from shipping containers may not be as simple as obtaining a conventional mortgage, however the end result will surely be worth the effort. If you have any experiences that you’d like to share feel free to post your comments below, or email our office directly and let us know if we can share them anonymously. As always, any questions are welcome.