There is quite a bit of confusion surrounding the ability to finance a container home. For starters, we have to be clear on one thing! We build houses! Not trailers, not mobile homes. Kubed Living follows the local building codes, not the HUD codes. So what kind of financing is available? The answer is: the same type of financing that is available to those that have chosen to build homes. Those types of loans are called "construction loans".
How do construction loans work? A construction loan is a loan that lends funds, following a specific disbursement schedule, during the construction process. In order to be able to qualify for one, you need to have documentation that shows what you are wanting to build. What does that mean?
It means that you not only need to have the land, but also drawings and plans of the home you are looking to build. A lender will then ask for a budget. How much is all that going to cost? Including site work, the home, the interior finishes etc....The lender takes all that information and then appraises the home as if it were finished- by comparing them to similar new homes of that size in the neighborhood . The lender then gives you a % of that value.
It probably seems daunting........it sort of is! But we are here to help.
The first step is a full design package. That will not only lay out your vision for the home, but will help manufacturing determine what the cost of it will be. Similarly, seeing the home on a plan, with foundation and site details will enable a GC to give a high level idea of the sitework and installation cost. Finally, you and us at Kubed Living can give $ allowances to the different areas of the home, so as to come up with a budget for the interior. All this gets put together as a Master Budget (together with a 3D visualization) and given to lender.
The lender then assigns an individual (usually the GC but can be the fabricator) to manage the cash disbursements.
At the end of the build, the construction loan gets turned into a conventional mortgage.
Hope this has helped clarify the mortgage process.....
If you have further questions, do not hesitate to reach out to our team members.
Thanks for the thorough response just saved me an email to you. One question on the Construction Loan approval same as regular mortgage? Meaning 20% down? Also in general finance rates similar to traditional mortgage loan?