Profile picture for jphifer1

who can loan on an earth sheltered home, no will give you an appraisal to use as loan value

  • July 08 2010 - Parrish
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Answers (7)

Profile picture for susanyengland
I live in an earth bermed home in Alabama and have for the last 21 years. I have a VA first mortgage and a second mortgage through another lender at 11.4%. My husband died recently, and my income and my income has dropped considerably. I very much need to refinance and combine the two mortgages, but am unable to because there are no comps. I have a 3 bedroom house on 6+ acres and only owe $78,000. Any suggestions at all?
Thanks
  • August 04
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Talk to a mortgage banker before moving forward with this type of home.  Make sure they do not layer on top of Fannie Mae's guidelines.  Non traditional home guidelines state that the cost approach can be used instead of using the comparable sales approach  I have financed a few of these earth homes and as long as there are other non traditional sales to use as comparables you should be fine.  These dont necessarily need to be other berm, or earth homes but having one similar sale does help.
  • July 09 2010
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Berm homes are usually cash transaction. To receive an appraisal, there needs to be similar sale comparisons. A berm home is an oddity. Comps cannot usually be found.

A lender is also looking at if they have to foreclose, how long will the property be on the market. .... Happy  funding, Rudi 
  • July 08 2010
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jphifer1, contact Chris to see if he can lend in AL. If he can, you just found your miracle lender. Aside from big utility savings, an earth home should give you good protection since Parrish is sitting in tornado alley, right?
  • July 08 2010
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Getting an appraisal on an earth home can be a little tricky as it is not a traditional home style.  The appraiser has to be able to find some sort of non traditional sales in the last year to compare to the property.

As far as financing is concerned; Mortgage lenders who do not "layer" or add additional guidelines to Fannie Mae's underwriting criteria will more than likely have an easier time financing a non traditional property.

I hope this helps!  Let me know if you have any other questions.

Chris
  • July 08 2010
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That is a tough one, do you already own it or thinking of building one? I think Chris Herford in Oklahoma worked on one of these last year, maybe he will post here.  
  • July 08 2010
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I believe the company that makes them is your best bet for financing...
  • July 08 2010
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