Adam Marcos, Author at BarndominiumZONE.com

If you want to build a barndominium, you’ll need financial capital and a lot of it. In fact, while a barndominium kit can cost as little as $27,000, that’s just the outer shell. You’ll also have to finance the foundation, drainage, insulation, interior, flooring, electric work, and plumbing. All of that can add up significantly – and you might need a loan of $200,000 or more – even if you’re not buying property. That can make financing your barndominium a challenge. This is especially true if you still have to finance property as well. However, there are plenty of financing options for barndominiums, including most traditional banks. The following includes 17 of the best ones. 15 Best Banks For Financing Barndominiums* Barndominiums typically fall under “modular homes”, meaning that you prefabricate them and then assemble them on-site. This means that you can finance them with any bank that offers to finance modular homes. In most cases, you can use any “Construction to permanent” or “Two-time close” loan construction to finance your barndominium. In addition to these options, there are also loan aggregators like Acorn Finance, which help to finance barndominiums by comparing lending options for you. Note banks are not ranked in any particular order. 1. New Century Bank New Century Bank encourages you to build your dream home regardless of the construction style. Our specialty is construction lending and residential mortgages and we welcome all types of designs and ideas. If your project is labeled barndominium, shed-home, SIP, house, or barn-home, New Century Bank is interested in sharing with you our expertise on what mortgage products apply to your situation. You might be surprised; it is not that difficult. Our expertise with construction lending is broad and we try to accommodate more project styles than any other lender. We encourage you to bring us your ideas. A good construction lender can have a huge impact on a client decision to build. New Century Bank’s positive approach to post frame, steel frame and post, and beam home construction is unlike any bank in the industry. We offer terms and features such as low-down payments and client-managed projects. Construction loans incorporate every aspect of the building process, land purchase included in the construction process, utilities, foundations, home and all interior finish and garage and other amenities. Every construction loan is followed immediately by the best mortgage available in the industry. No one has more resources than New Century Bank. Construction mortgages for barndominiums Nationwide Financing for the lower 48 states 30-year Amortizations with Conventional Rates No need to be an existing customer Website: https://www.newcenturybankna.com/ Corporate Address: 2815 Anderson Ave, Manhattan, KS 66502 Phone: 785-532-9066 Request a Free Barndominium Financing Quote Request a Free Barndominium Financing Quote Step 1 : Are you building or buying a Barndo? Building Buying In Partnership With Barndominium Finance If you are human, leave this field blank. Next 0% Complete1 of 4 2. Flagstar The Flagstar bank offers a wide range of construction loans including construction-to-permanent and two-time-close loans for modular homes. You can also choose an owner construction option if you’d like to put a barndominium kit together on your own and do the internal work yourself. Flagstar also covers every part of your barndominium build, even if you still have to buy real estate. Their flexible lines of credit are also ideal if you want to pay builders as they invoice you – rather than taking out a loan as a lump sum. In addition, with 395 branches across the U.S., Flagstar offers barndominium financing in every state in the United States. Finances modular homes and property purchases Credit lines available Credit Score: 620+ Loan downpayment starting from 3% Simple closing fees Multiple construction loan options A+ BBB rating Website: https://www.flagstar.com/ Corporate Address: 5151 Corporate Drive, Troy, MI 48098 Phone: (866) 372-3221 3. Nationwide Home Loans Nationwide Home Loans is one of the most popular lenders for new build metal homes. That’s true whether or not you have to buy the property as well. However, this lender has a minimum loan value of $250,000 – meaning they aren’t suitable for anyone who wants to purchase a barndo kit and then do most of the work themselves. Nationwide does offer flexible and cost-saving construction loans. The lender uses a 12-month build period. Afterwards, or when you show the bank your certificate of occupancy, you start paying interest on the loan. This can save you a significant amount over a traditional personal loan – while giving you plenty of room to cover the costs of interior, plumbing, electricity, etc. Finances modular homes and property purchase Credit Score: 620+ Loan downpayment starting from 0% Consolidated closing fees and interest rates 12 month construction period A+ BBB Rating Website: https://www.nhlfinance.com/ Corporate Address: 6500 S Quebec, Englewood, CO 80111 Phone: (805) 519-8927 4. Go Mortgage Corporation Go Mortgage Corporation offers construction loans for homes and modular homes, with support to purchase real estate. With 5 separate construction loan offerings, this digital-first lender offers versatility, so you can choose how you want to close and restructure your loan after the construction period. In addition, with a build period of 12 months, this lender is ideal for giving you enough time to finish the interior before paying interest. However, Go Mortgage is currently only available in 35 states. In addition, they do not have physical branches, meaning you’ll have to apply for and request your loan online. Finances modular homes and real estate purchases Credit Score 640+ Loan downpayment starting from 3.5% Consolidated interest rates and closing fees 5 Construction loan options 12-month construction period A+ BBB Rating Website: https://gomortgage.com/ Corporate Address: 4215 Worth Ave Ste 320, Columbus, OH 43219 Phone: (800) 444-7283 5. Wells Fargo Wells Fargo offers several loan and mortgage options suitable for modular homes. In addition, the bank has a first-time homebuyer program suitable for buyers who potentially have low or no credit. That makes this bank a great option if you’re investing in your first home and may have to purchase real estate and then build on it. Wells Fargo also offers rate locks over the construction period of their loans. This means that if interest rates go up over the course of the 6-24 month construction period, you’ll pay the same rates as when signing the loan. Of course, that works the opposite way as well if rates go down. Wells Fargo is also one of the largest lenders in the country, meaning you’ll get service and loan options everywhere in the U.S. Finances modular homes and real estate purchases Credit Score 620+ Loan downpayment starting from 11% No consolidated closing rates Multiple construction loan options Not BBB accredited Website: https://www.wellsfargo.com/ Corporate Address: 420 Montgomery Street, San Francisco, CA, 94104 Phone: 800 9564 4422 6. LoanDepot LoanDepot is a banking lender specializing in home mortgages. In 2022, the lender introduced options for financing the construction of prefab homes such as barndominiums. This means you can get a loan based on pre-fab construction, although they won’t cover the cost of purchasing real estate up front. In addition, with no variable close options, you may pay multiple stages of closing fees with a traditional construction loan. However, LoanDepot offers buyer-friendly loans even if you have low credit scores. For example, their lending starts out for credit scores of about 500, although you’ll pay a downpayment as high as 20%. That downpayment drops as low as 3.5% if your credit score is over 620. Finances modular homes Credit score 500+ Loan downpayment depends on credit score, but from 3.5% No consolidated closing rates Construction loan options with no lines of credit A+ BBB Rating Website: https://www.loandepot.com/ Corporate Address: 26642 Towne Centre Drive Foothill Ranch, CA 92610 Phone: (866)258-6572 7. Chase Bank (JP Morgan Chase & Co.) Chase Bank or JP Morgan Chase is one of the largest mortgage lenders in the United States. It’s also one with the highest requirements, as you normally need a credit score of 700+ and a downpayment of 20%. However, JP Morgan Chase offers good interest rates and offerings, meaning it can be a great choice if you meet the prerequisites. Chase Bank also offers modular construction loans with lines of credit, meaning you can pay construction and contractor companies as they invoice you. Afterwards, you can consolidate the construction loan into a traditional mortgage and start paying interest. Real estate and modular home loans available Credit score 700+ Loan downpayment starting from 20% No consolidated closing rates Construction loan options with lines of credit A BBB Rating Website: https://www.chase.com/ Corporate Address: 270 Park Avenue New York, NY 10017 Phone: 1-800-935-9935 8. Fairway Independent Mortgage Fairway Independent Mortgage is one of the largest mortgage providers in the United States. It also offers multiple loans suitable for modular housing. However, with no construction loan options, it’s not a great choice for paying contractors. This makes Fairway a better choice for sourcing pre-fab kits and for paying contractors upfront in bulk sums. Fairway also offers relatively buyer-friendly offers, with personal loans designed around home-buying. However, the lender offers fewer options suitable for real-estate purchases. Fairway also has a relatively low credit score requirement and relatively low downpayment requirements, making this a great option for first-time homebuyers. Prefab home loans available Credit score 580+ Loan downpayment starting from 0% Consolidated closing rates available No construction loans available A+ BBB accredited Website: https://www.fairwayindependentmc.com/ Corporate Address: 4750 S. Biltmore Lane Madison, WI 53718 Phone: 1-800-201-7544 9. FMC Lending FMC Lending offers loans for modular housing projects like barndominiums no matter your credit. However, it does come with stipulations, like higher interest rates and higher downpayment requirements. For example, you’ll have to pay a 20-25% downpayment. You’ll also have to pay an interest rate between 7.99% and 10.99%. For short-term loans of 1 year, that won’t be too bad. So, this can be a great way to get started on your building project without waiting a year to save up for the barndominium kit. However, it can be pricey over the course of 15 years. Provides loans for modular homes Credit score not required Loan downpayment starting from 20% No consolidated closing rates Construction loans with no lines of credit Not BBB Accredited Website: https://www.fundmortgagecapital.com/ Corporate Address: 380 Beach Rd Ste A, Burlingame, California, 94010 Phone: (415) 358-4223 10. North American Savings Bank The North American Savings Bank (NASB) provides construction loans for modular homes including real estate purchases – although standard construction loans don’t include this. In addition, this offering does not include a line of credit – which means you’ll have to pay contractor invoices from your bank account. North American Savings Bank also covers real estate purchases, providing they fit into the maximum value of your loan. Also, the lender is primarily digital, meaning most offerings are online only. Provides loans for modular homes and real estate Credit score of 620+ Loan downpayments starting from 3% No consolidated closing rates Construction loans with no lines of credit A+ BBB rating Website: https://www.nasb.com Corporate Address: 903 E 104th Street Building C Ste 400, Kansas City, Missouri, 64131 Phone: 866-599-9800 11. Normandy Normandy is one of the only lenders specializing in prefab and modular homes and buildings. The lender also offers to cover up to 75% of the cost of purchasing real estate. That makes this lender a great option whether or not you have land. However, most Normandy loans are intended for a shorter term. This means they may not convert well into a mortgage on the property. However, most do. You’ll have to discuss terms and conversion options with your consultant before signing the loan. Normandy offers loans in 15 states. Provides loans for modular homes and up to 75% of real estate Credit score of 620+ Loan downpayments starting from 10% No consolidated closing rates Construction loans with no lines of credit A+ BBB Rating Website: https://normandy.com/ Corporate Address: 46 Prince Street, Rochester, New York, 14607 Phone: 800-390-7536 12. TD Bank TD Bank is a fully digital bank offering loans for modular homes and property purchases in 15 U.S. states. The lender uses a series of loan constructions including multi-stage close loans with consolidated closing options – making them ideal for homeowners who have to pay construction contractors in multiple stages. In addition, TD Bank is one of the few loan options that don’t require your modular home to be a permanent build. This means you can finance the home before choosing the property if you so choose. Provides loans for modular homes and real estate Credit score of 620+ Loan downpayments starting from 3% Consolidated closing rates Construction loans with lines of credit A- BBB rating Website: https://www.td.com/ Corporate Address: 357 Kings Hwy N, Cherry Hill, NJ, 08034 Phone: 856-482-6662 13. Truist Truist is a large bank offering loans for modular buildings including barndominiums and other prefabs. In addition, the bank prefers existing customers and you will likely get better rates with an account already open. However, Truist offers good loans and lines of credit built around modular buildings like barndominiums. These include lines of credit which are based on the building you’re buying and the work that needs to be done. Keep in mind, though, that Truist does not always offer loans for real estate purchases. Provides loans for modular homes Credit score of 620+ Loan downpayments starting from 3% Consolidated closing ratings Construction loans with lines of credit available A+ BBB Rating Website: https://www.truist.com/ Corporate Address: 214 N. Tryon St., Charlotte, North Carolina, 28202 Phone: 844-487-8478 14. U.S. Bank The U.S. Bank offers mortgages and construction loans for modular homes with a foundation. It also offers real estate loans as part of that. The U.S. Bank also has relatively flexible credit score requirements and loan downpayment requirements as you can get a loan with a score as low as 500, but 620 is preferred. In addition, the U.S. Bank offers lines of credit, making it easy to pay for invoices as they come in, without transferring money between your account first. However, the lender does not have consolidated loans, meaning you will pay closing rates when you convert the initial loan to a mortgage. Provides loans for modular homes and real estate Credit score of 620+ Loan downpayment starting from 3% No consolidated closing rates Construction loans with lines of credit available A+ BBB accredited Website: https://www.usbank.com/ Corporate Address: 800 Nicollet Mall, Minneapolis, Minnesota, 55402 Phone: 1-800-872-2657 15. First National Bank First National Bank offers a large number of lending options for anyone building a barndominium. However, this lender is primarily online, meaning you likely won't have a nearby branch. At the same time, they offer fixed-rate mortgages and lending options, with the option for a line of credit with a construction loan or a construction loan that converts into a mortgage. Provides loans for modular homes and real estate Credit score of 620+ Loan downpayment starting from 20% Consolidated closing rates Construction loans with lines of credit available Not BBB accredited Website: https://www.fnb-online.com/ Corporate Address: 3015 Glimcher Blvd., Hermitage, PA 16148 Phone: 1-833-226-5362 Alternative Barndominium Financing Options If you don’t want to approach a bank for a traditional line of credit, there are other alternatives for financing your barndominium. Here, the largest part of costs is usually not the building but rather the interior furnishing and finishing. Also see our full list of Barndominium financing options available on the market. Owner Builder Loans Owner/builder loans function similarly to a construction loan except you’re expected to do the work yourself. This means you won’t have to submit invoices and other details to your bank. It also means you won’t have to have your suppliers and contractors sourced before requesting the loan. This can simplify the process. However, it does mean that you’ll typically receive a lump sum from the loan – deposited in your bank account. Owner/builder loans also typically require a higher rate of equity or assurance, although this can vary quite a bit. Financing Schemes from Suppliers Several barndominium suppliers offer equity and payment plan options. Some also work with private loan providers to deliver custom loans built around the needs of purchasing a barndominium. However, these will vary in availability and rates. In addition, as private loans, they will normally come with higher interest rates. Financing schemes allow you to invest in the barndominium and then pay it back at a slower rate. These plans, however, are normally only available for barndo kits rather than for custom work. FHA Loans FHA loans are guaranteed by Federal Housing Association – allowing you to get a loan even if you have low or bad credit. Here, you can typically get a loan with a credit score of as low as 500, providing you have a downpayment of 20%. Not all FHA loans are available for modular housing. However, they can make loans accessible, even if your credit is bad. USDA Loans USDA loans offer loans and mortgages for low-income families in rural areas. Here, loans may be all or partially a grant. In addition, rates, downpayment options, and interest rates vary considerably depending on your income and location. In some cases, you may also qualify for a real estate loan, however, these loans are normally intended to build housing on existing land. Equity Loans If you already own property, you may be able to use it as equity to request a loan that covers the cost of your barndominium. Depending on the local value of land, an equity loan can more than cover the cost of the building and possibly the interior as well – especially if you’re using a barndominium kit. Personal Loan Personal loans are normally offered at a higher interest rate than mortgages. In addition, you may find that the credit score requirements are higher. However, these loans extend you a personal loan for personal reasons, such as buying and installing a barndo. These loans are a great option if you primarily intend to purchase a kit and install it yourself – and then do the work yourself over a longer period. However, you won’t usually be able to get one high enough to cover the cost of the land and the interior as well. Next Steps Financing a barndominium is normally relatively simple. Most banks cover them under “modular housing”, or “prefab housing”. Here, requirements are normally that your home has a foundation. Once it does, the loan converts to a mortgage on a standard house after construction – giving you 15-30 years to pay back the mortgage. Otherwise, there are no real complexities to financing a modular home – other than the fact that not all lenders cover them. In addition, modular homes normally have a lower value than stick-built homes. This means your total mortgage will have less equity behind it and any refinancing you do may not have the same effect as if you had a traditional home. However, because the initial mortgage is also likely to be lower, that shouldn’t be too much of a problem.