Financing Your Tiny Home

May 18, 2022

How To Finance Your Tiny Home

Financing is another one of the biggest questions asked when looking to purchase a tiny home.  Of course, there are always exceptions to every rule but this is what we have found to be true when working with our clients.  

Want to know if you may be qualified for financing for a tiny home? CLICK HERE to take a quick 5 question assessment.  Enter your information and you will be taken to the assessment page. 

How do I get financing for my tiny home?

The largest differences in how to get financing can depend on if you are planning to build your own home or if you are looking to hire a builder.  We discuss what both cases may look like for you.

Building your own tiny home with your own 2 hands is the most affordable way to go. You may hire trades to do some of the most important work, but your materials are going to be your largest cost.   

If you are building your own tiny home and if you are on a lower end budget, less than $65,000.00 CAN or less than $45,000.00 USD it is very important that you are sourcing the proper materials and building correctly.   If you are purchasing a home and find one for less than the numbers that are mentioned above, please make sure you are doing your due diligence.  Chances are the home will not be certified, will not be able to be legally towed across provincial or state borders, may not be able to insure it and chances are if it is built by a builder, they have highly undervalued their product and their time.  In this case, it is likely the builder will not be around for long to support you or any service and warranty issues that arise when living in a newly built home.

If you are building on your own then it's likely that you will have to go get a personal loan for your building materials.  This may include things such as a line of credit or credit cards. 

A builder built home is a bit different. 

If you are looking to build a tiny home on wheels with a builder, there is a greater chance of getting an RV loan for your tiny.  Financial institutions will typically look for RVIA or CSA RV or Park Model certification for these builds.  

RED FLAG:  If your banking representative believes they can arrange a traditional mortgage for a tiny home on wheels this is wrong.  It is very unlikely that a mortgage will be an option because the home is not permanently attached to the ground. Traditional mortgages only apply to dwellings that are fixed to the land.

Foundation Series Tiny Home: The Foundation Series tiny homes are homes that are Ready-To-Move style and certified in Canada to CSA A277 guidelines.  This would mean that the home is installed onsite on a foundation and hooked up to city services. In this case, you may be eligible for a chattel mortgage, similar to that of a mobile or manufactured home. Check out more at here on the Foundation Series: https://www.howtobuildatinyhome.com/the-foundation-series

 

The basic rules of obtaining financing:

If you have poor credit, no money, no proof of income, and no savings, it is very unlikely anyone is going to finance you and give you money.  To obtain financing one must have a good credit score, a down payment, and proof of income that you will be able to pay back the lent money.   Want to know if you may be qualified for financing for a tiny home?  CLICK HERE to take a quick 5 question assessment.