| User | Post |
|
1:23 pm
December 30, 2011
|
Little House
| | |
| Member | posts 652 | 
|
|
|
I posted an interview with the owner of ShelterKraft Werks who builds container homes. His homes are really reasonably priced and vary in size. The biggest problem he has encountered is that banks and HUD won't finance his homes if they are under 400 sq ft.
Anybody know what this is about? Why won't a bank finance a home that is under 400 sq ft? Is there some stipulation that a home must be a certain square footage? I'd love to write a follow up post on this topic: How to finance small homes.
Thanks in advance!
|
|
|
|
|
5:07 pm
December 30, 2011
|
retireby40
| | USA | |
| Member
| posts 1381 |
|
|
|
Sorry, I have no idea, but great post. :)
|
|
|
|
|
5:11 pm
December 30, 2011
|
Little House
| | |
| Member | posts 652 |
|
|
|
retireby40 said:
Sorry, I have no idea, but great post. :)
Thanks, Joe!
|
|
|
|
|
5:57 pm
December 30, 2011
|
jaicatalano
| | New York | |
| Member | posts 846 |
|
|
|
I don't know either but I know the banks are not refinancing my home for a million different reasons and feel that they are just being driven by bad economic times with no reason to help others if policy isn't making them do so. It's a shame the housing market has not helped more with over 4 million homes in some form of distress.
|
|
|
|
|
6:18 am
December 31, 2011
|
Frugal Confessions
| | Houston, TX | |
| Member
| posts 1622 |
|
|
|
That stinks–how badly is it hurting his business? Great post idea. I will check it out today!
|
|
|
|
|
10:47 am
December 31, 2011
|
TightFistedMiser
| | |
| Member | posts 361 |
|
|
|
My guess is that the brokers are concerned abut the marketability of a home under 400 square feet.
|
|
|
|
|
11:23 am
December 31, 2011
|
Little House
| | |
| Member | posts 652 |
|
|
|
jaicatalano said:
I don't know either but I know the banks are not refinancing my home for a million different reasons and feel that they are just being driven by bad economic times with no reason to help others if policy isn't making them do so. It's a shame the housing market has not helped more with over 4 million homes in some form of distress.
Yes, it is a shame. But if banks loaned money to smaller, more sustainable housing structures, there wouldn't be as many foreclosures or distressed properties since the price on a small home is more reasonable – especially the ShelterKraft Werks homes; they cost under $100K.
|
|
|
|
|
11:25 am
December 31, 2011
|
Little House
| | |
| Member | posts 652 |
|
|
|
TightFistedMiser said:
My guess is that the brokers are concerned abut the marketability of a home under 400 square feet.
You're probably right. But if brokers came up with a shorter term -say 10 – 15 years to finance a small structure (which would be very affordable still) then they wouldn't have to worry so much about the marketing aspect. Hopefully the homeowner would stay in the home long enough to pay off the mortgage. Maybe I'm just too idealistic. 
|
|
|
|
|
9:00 am
January 1, 2012
|
sixfigure
| | |
| Member | posts 25 | |
|
|
LH, I'm not a broker. The only limits I'm familiar with are for mortgage amounts, a mortgage below a certain amount may not be worth the paper work (50K). In Manhattan, it is possible to buy a smaller than 400sq ft apartment, I would be surprised if you couldn't get a mortgage for it.
sfi
|
|
|
|
|
10:44 am
January 1, 2012
|
JT_McGee
| | |
| Member | posts 723 |
|
|
|
Post edited 10:49 am – January 1, 2012 by JT_McGee
TightFistedMiser said:
My guess is that the brokers are concerned abut the marketability of a home under 400 square feet.
No joke; that's what I'm thinking. Loans on real assets are great when the real asset serving as collateral is desirable. The 400 sqft homes are really cool, but lacking tremendously in practicality.
We don't even have 400 sq ft apartments where I live. Mine is on the smaller side at just under 800 square feet. I can't imagine living in less than 400 sq feet, nor paying so much that I'd have to have a mortgage for such a property.
|
|
|
|
|
10:46 am
January 1, 2012
|
smartfamilyfinance
| | |
| Member | posts 103 |
|
|
|
Just guessing, because I'm not a mortgage broker, I'd say it has to do with the structures and building materials. I know that manufactured homes often depreciate quickly, thus many banks see lending for those types of structures as too risky.
But, just a guess though.
|
|
|
|
|
11:28 am
January 1, 2012
|
Little House
| | |
| Member | posts 652 |
|
|
|
sixfigure said:
LH, I'm not a broker. The only limits I'm familiar with are for mortgage amounts, a mortgage below a certain amount may not be worth the paper work (50K). In Manhattan, it is possible to buy a smaller than 400sq ft apartment, I would be surprised if you couldn't get a mortgage for it.
sfi
You're right. I'm sure that a person could get a mortgage on a condo for under 400 sq ft. The problem with the container homes must be that they are small, yet qualify as a "house" and banks don't see any equity in a structure like that. Of course, some of the container homes are under 50K, so maybe that's the problem and not the square footage.
|
|
|
|
|
11:30 am
January 1, 2012
|
Little House
| | |
| Member | posts 652 |
|
|
|
smartfamilyfinance said:
Just guessing, because I'm not a mortgage broker, I'd say it has to do with the structures and building materials. I know that manufactured homes often depreciate quickly, thus many banks see lending for those types of structures as too risky.
But, just a guess though.
That's a good point. I'm guessing banks may not like the fact the house is made from a shipping container.
|
|
|
|
|
11:31 am
January 1, 2012
|
Little House
| | |
| Member | posts 652 |
|
|
|
JT_McGee said:
TightFistedMiser said:
My guess is that the brokers are concerned abut the marketability of a home under 400 square feet.
No joke; that's what I'm thinking. Loans on real assets are great when the real asset serving as collateral is desirable. The 400 sqft homes are really cool, but lacking tremendously in practicality.
We don't even have 400 sq ft apartments where I live. Mine is on the smaller side at just under 800 square feet. I can't imagine living in less than 400 sq feet, nor paying so much that I'd have to have a mortgage for such a property.
Six Figures brought up a good point; there are plenty of apartments in NYC that are that small and would probably qualify for a mortgage. However, with the shipping container homes, banks probably don't like the fact that they are "houses" that are really tiny. And you're right, if the home costs under $50K, why would a person need a mortgage?
|
|
|
|
Login
Search 
Home
Print this Topic 
Topic RSS 
