Financing Options for Tiny Homes
Bruce asks: I'm trying to understand the common methods of financing tiny homes. What are the options?
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This is a little bit outside of our scope so I asked the question of CoPilot, the Microsoft AI tool, and it suggested the following:
Financing a tiny home can be a bit different from financing a traditional home due to their unique nature. Here are some common methods of financing tiny homes:
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Personal Loans: These are unsecured loans that don’t require collateral and are one of the most common ways to finance tiny homes1. The APR on personal loans can range from 3% to 36%1.
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RV Loans: If your tiny home is mobile and not built on a permanent foundation, you might be able to finance it with an RV loan1.
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Contractor or Builder Financing: Some tiny home builders offer financing options to their clients1.
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Cash: Paying outright with cash is always an option if you have the savings to cover the cost1.
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Credit Card: Though not the most advisable due to high-interest rates, some people use credit cards for financing.
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Home Equity Loan: If you already own a primary residence, you might consider a home equity loan2.
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Online Lenders: There are online platforms that provide personal loans specifically for tiny homes2.
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Local Credit Unions: Some local credit unions may offer financing options suitable for tiny homes3.
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Manufacturer Loans: Some tiny home manufacturers may offer their own financing solutions4.
It’s important to research and compare these options to find the best fit for your financial situation and the specifics of your tiny home project. Remember to consider the terms, interest rates, and any potential restrictions or requirements associated with each financing method.
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And here are a few related resources we have shared on our website:
Helping Low-Income Homeowners Become Landlords in Denver: https://www.strongtowns.org/journal/2018/10/2/helping-low-income-homeowners-become-landlords-in-denver
Big Win for ADUs: FHA To Count Rental Income for Mortgages: https://www.strongtowns.org/journal/2023/10/19/big-win-for-adus-fha-to-count-rental-income-for-mortgages
The Bottom-Up Revolution Is…Building an Accessory Dwelling Unit and Helping Others Do the Same: https://www.strongtowns.org/journal/2022/9/29/sarah-cipkar-bottom-up
Financing rules reinforce concentrations of poverty: https://www.strongtowns.org/journal/2016/2/12/financing-rules-reinforce-concentrations-of-poverty
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