Can You Get a Loan for a Barndominium?

Can You Get a Loan for a Barndominium?

Barndominiums are either barns that have been renovated into a home or a new home construction that’s built to look like a barn. 

These “barndos” are all the rage in the housing landscape these days, especially here in the south.

They’re typically made with metal (or a combination of metal and wood) which gives them a durability that appeals to homeowners. They also tend to be more cost-effective than building a traditional home. 

Wondering how to get a loan to build a barndominium? Joel Kavanaugh and his team are here to help you figure out how. 

Can You Get a Loan for a Barndominium?

The short answer is yes! But, there are many factors to consider when financing a barndominium construction. 

Credit Score

Applying for a barndominium loan is similar to any other loan application. Your credit score and report will be checked, so you want to make sure you have a good rating to be considered for a loan. Contest any errors you see on your report to boost your score. 

Your Lender

There are a wide variety of lenders to choose from, including national lenders, local banks, credit unions, and mortgage brokers and lenders. You’ll need to discuss with each of these lenders whether they will finance a barndominium. Be sure to ask about interest rates, down payment expectations, and a ballpark estimate of closing costs. 

Take your time to find a lender you trust who will be upfront, honest, and helpful through every step of the process. 

Location, Location, Location

The appraisal of your barndo will depend on recent sales in your area. Since barndominiums are relatively new in the market, there may not be many similar structures nearby where you want to build or buy. Be sure to discuss this with your lender so that your appraiser can accurately figure out how to value your property. 

Plans & Blueprints

If you’re planning to build your barndo, make sure you have a solid plan outlined to show your lender. You’ll want blueprints, interior details such as types of flooring and countertops, a list of supplies needed to get the job done, and any bids or estimates you’ve received from contractors. 

These outlined items will show your lender that you’re serious and ready to make your dream barndo a reality. It will also help them to accurately value your new living space. 

What Types of Loans Are Available for Barndominiums?

There are a variety of loan programs to choose from for your barndo. The below list is just an overview of the available options, but your lender can walk you through which one would be best for you. 

Conventional Loans

A conventional loan is likely what you think of when you think of a home loan. You put down a percentage of the home’s cost upfront and then make monthly payments of principal and interest for 15-30 years to pay the loan back. Conventional loans are offered by a wide variety of lenders. 

Construction Loans

If you’re building a barndo instead of buying pre-built, you may want to consider a construction loan. These loans cover the cost of the actual construction of the building. 

Once the property is built, you’ll then switch from construction to a permanent loan where you work to pay off the value of your built home. 

USDA Loans

USDA loans are only available in certain rural areas, so they can be a good option for a barndo if your property is in an eligible zone. 

These loans are great for people with limited income because they offer 100% financing—meaning no down payment is required from you. You won’t start making payments until your barndo construction is complete. 

You’ll need to discuss eligibility requirements with your lender to see if you qualify for a USDA loan. 

VA Loans

If you’re an active military member or veteran, you can apply for a VA loan for your barndo. However, you may end up having more hoops to jump through by doing so. VA loans have more requirements for new lenders and even more requirements if it’s a new construction home. 

Your lender can discuss if a VA loan will work for your situation. 

Work With Joel & His Team To Finance Your Barndominium 

Joel and his team would love to help you get a loan for your barndominium! Our amazing team is here to guide you through the home loan process. We’ll discuss the best financing options for your situation and walk you through everything needed to get from the application process to homeownership. 

We are with you every step of the way to your barn home!

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