# Barndominium financing issues



## boom725 (Sep 19, 2015)

Hey guys, first post here for me. I'll keep it short and sweet. I built myself a barndominium and found that several other want one too. The only problem is banks don't like to finance "barns" as primary residences. So then we went back with the terms "steel framed home" and finished the exterior with brick and got away with one. Any other help or loopholes to get through this type of snag?


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## po boy (Jul 12, 2010)

boom725 said:


> Hey guys, first post here for me. I'll keep it short and sweet. I built myself a barndominium and found that several other want one too. The only problem is banks don't like to finance "barns" as primary residences. So then we went back with the terms "steel framed home" and finished the exterior with brick and got away with one. Any other help or loopholes to get through this type of snag?


Issue is most likely comparable sales.


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## Fishindude (May 19, 2015)

I could see how a bank would feel that way.
Although they are often pretty practical for the user, these barndominiums have a much smaller buyer market, might not hold value as well as a conventional home, and may be harder for the bank to sell in the event they had to foreclose.


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## chuckhole (Mar 2, 2006)

The other financing issues we ran into are the amount of land and the value of the home. The general information we received is that you can not homestead a tract larger than 5 acres (for tax purposes) and that when financing and/or insuring a home, it must be at least 60% of the total land/home value.


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## miraclemant (May 28, 2011)

A Year ago July, I closed on my 18 acres with a very small 3/1 home on it. 

The problem I ran into is that when I went to half a dozen different banks for a home loan, each one told me that they could not do rural property loans anymore, if it involved over 10 acres. That the Federal government had quietly taken over all rural home loans involving anything over 10 acres. And that I had to get my loan from "Farm Credit". (which by the way charges an interest rate of about 1% point higher on home loans). 

On the plus side, I only had to put 15% down, and no PMI was required. Although they do NOT escrow taxes or insurance, so it is my responsibility to come up with that money each year, which is fine, as it is not a lot of money each year.

Now it is my firm believe that everything the Federal government touches, it destroys, including the free market rural home loans. 

We MUST take our country back from the Federal government.........


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