Exactly....then people go all out and spend 500k on a barn

Yup- the costs is so low already, no need to refinance .

Started that way then material and labor went to hell.

this. I have about $50k saved right now. whenever I get my savings up to a specific point, the build will start and I will funnel funds on an "as needed" basis

@@casualpeenjust built a 1400ish square foot barndo for 55ish doing all the labor myself with some great friends. Fixing to start another one. What this guy is saying is if you have issues refinancing or financing the barndo. You find a new bank. Most people are scared to look elsewhere but it’s not an issue. Really

How much is it costing you?

@truckingwithtobee2974 , I have a budget of $250k-300k. We are looking at land right now. Looks like I can buy a 5 acre lot, clean it up, do improvements, driveway, well, septic, and electrical for about $100k. That leaves 150k-200k for the house. I'm doing an ICF Ranch with a full basement. Basement will be largely open, simple, I'll put in 1 bedroom, a mechanical room, a laundry room, and 1 bathroom. Doing all the work myself.

@@getinthespace7715 Doing the work y/self is the ONLY reason the cost is what it appears to be. People (like the person above?), are talking RETAIL, not a "DIY" cost.

Congratulations on the new barndominium!

Hi, would you be willing to help us? We live west of Denver and are looking for a house. Ideally we would rather a bardo with shop space but don’t know where to begin. I understand the building process but am confused about the financing and timeline part

@@Vanpham-xe3oj Hello! We can only finance barndominium construction loans in Michigan and Florida. However, if you intend on purchasing a barndominium we can help with that (a little odd, yes haha. We are a small bank, so specialty loan programs are limited for out of state.) If you just want to chat and get some insight, please fill out our contact form. www.mykalamortgage.com/contact One of our barndominium specialist will get back to you after Christmas. Also, we are launching a barndominium newsletter very soon. A lot of topics will be covering the financing questions that many people have been asking. As a member you will have access to weekly webinars where our financing specialist will be available for questions. I will message you when this goes live!

⁠@@Vanpham-xe3oj Confused about financing? My advice is to not finance. Timeline? You plan it, you do what you want when you want to do it. That’s not confusing.

Who do you finance with?

It really all comes down to the programs a bank has to offer and comparable houses for appraising. That's great you got in at a time that rates were still good! From what we are hearing anyone that got into a house before the rate jump won't have to worry about refinancing for some time. But, they will come back down at some point.

I would think the financing may be harder for a less traditional structure. We have a barn house that’s stick built for horse farm and there are no homes to compare it to for pricing and financing when we sell. Cool design for horse lovers and extra room as a guest house. These are cool homes and I’m hoping to see more of them built here.

@@bridaw8557Honestly if your are building any personal residence financing is much more difficult and painful. Construction to permanent financing is not offered by every lender, I know many of the large banks like Bank of America eliminated those finance products probably 6 or 7 years ago. And even after you do line financing it is common for them to release funds in stages as construction milestones are reached. For example until the plumbing or electrical passes inspection often they will not release funds for next stage work which can impact the ability to order necessary materials for the next phase resulting in delays in the build because the materials are there yet. The banks are trying limit their risk by providing funds as the build progresses so someone doesn’t get the full construction loan amount lump sum and the not complete the construction leaving the bank trying foreclose on something partially built and that also can’t be sold to recoup the amount that was borrowed.

That is awesome! It is a great feeling to be debt free. Unfortunately, it's not a possibility for everyone. We try our best to guide our clients to setup a mortgage plan that aligns with their housing AND financial goals. Congratulations again on being DEBT FREE!

Where in TX? I want to do the same north of McKinney TX

@@joetatoesniff9525 Out near Granbury/Glen Rose area.

You're welcome!

That is awesome!

On a buy-down, you have 2 options - to negotiate with the seller to pay for it or have the bank fund the buydown. If the bank agrees to it, they require a higher interest rate to help offset the costs and this will often reduce the savings drastically compared to a seller funded buy down.

We tend to agree with you. What we saw in 2020-2022 is what we believe to be an economic anomaly. Having said that, we do believe there is a high probability of lower rates in the future based on prior federal reserve actions when it comes to the cyclical and correlated nature of the economy and interest rates. Because of this, properly understanding ALL of your options and the resulting affects is imperative when selecting a financing program.

Yes, being debt free is always the goal. You would be surprised that is not always a priority for some. And, paying all cash may not always be an option for some. They either can wait years to save the money, or if their goal is to get out of a rental/current house and build a barndominum, that’s where we come in to help. Thank you for the comment and best wishes!

Thank you!

It depends on the home itself, but when we are talking about the typical 'Barndominium', we provide conventional financing and it is not considered 'commercial. In regards to resale of the home, because Bardndominiums have become more 'main stream' we are not seeing issues with 'marketability' or lack of demand due to the type of construction, if anything, demand has increased dramatically due to the desirability of the look and open concepts the homes provide. Great questions - thank you for your interest!!

@@wilyceyote - people can get loans for them if they work with lenders that specialize in financing them. In regards to holding value, we have not seen any statistics or data to prove that they don’t hold value the same as conventional construction. If you have or aware of data sets that demonstrate this to be true I would be very interested I seeing or reviewing the information. Currently, both major lending agencies Fannie Mae and Freddie Mac have addressed the issue of valuation in guidelines as well. Within the last 9 months I had a Barndo sell less than 1 mile away from my home in Michigan for $1.1 Million. Based on trends we continue to see, barndos appear to be appreciating the same as any other style of housing.

@@barndobankers reason why I know about barndominion I live in one as well I love my barndominion but I noticed they are a higher cost maintenance and repair. Set mines over 10 years old. Notice a lot of things repaired

Awesome! We are here for any questions you may have. If you go to our website, www.mykalamortgage.com, we have a list of barndominium builders in the state of Michigan. We can only finance construction loans in Michigan and Florida. We can finance purchase loans in other states, if you plan on buying a barndominium. If you are planning on building and it's not in Michigan or Florida, we do have connections in other states for builders and other lenders. Please reach out to us on contact page of our website where you plan on buying/building a barndominium and if we have someone in your area, we will be happy to get you connected with them.

Ah. You’re selling mortgages.

Yes it is. We don't do them, but there are lenders out there that can.

That is a GREAT question and I wish I had the statistics to share with you but I don’t. Based upon the conversation I have with people, I would guess that it is a reasonable number but a minority still compared to those who have to finance at least a portion, simply due to today’s building costs. You are also correct about ‘cash builds’ limiting the amount of data for banks to use….. that information would not be available for appraisers to pull so until the home SELLS, it will not be available to use as a comparable for appraisal purposes.

I been reading you can’t get a conventional loan. On a metal or post construction. So resale is an issue

@@edlacapra1690 Interesting

Are they harder to finance and appraise? The answer to this question is related because barndominiums aren’t harder to finance, UNLESS the appraisal affects the terms of the loan. And the appraisal is dictated by the build itself. For example, if someone were to build a 4000 sqare foot barndo with less than 1000 feet of living space and only 1 bedroom, unless there were similar properties that have sold to support the value and marketability of this type of structure, the appraisal would impact financing. This also segues to your second question about are they harder to sell --- this really depends on your local market and if other buyers are attracted to this type of construction. Where we are at in Michigan, the barndominium style home is becoming very popular and that is reflected in the resale of properties. Just recently we had on sell for $1.1 Million dollars less than 2 miles from my own home. Are they viewed differently from stick frame houses? If you are referring to a post frame construction, some appraisers will make adjustments based on “quality of workmanship” but a lot of that will depend on individual appraisers and what they see on the specification sheets of the building contract they are provided with. Otherwise, they are treated like traditional construction.

I have not had that issue with my own barndominium. Due to it being more of a hangout barn versus my primary residence, I did not have a HVAC system installed. I did have in-floor radiant heat installed and a GIANT fan with a few smaller ones in the loft. In the winter that radiant flooring works amazing, and in the summer with the fans it never is uncomfortable. (In Southern states air conditionings in my opinion would be needed.) Like mine, many barndominiums builds go the route of using srpay foam insulation. If done correctly, it is one of the best ways to make a barndominium energy efficient. I'm not a certified HVAC tech or contractor, so there may be others that can answer your concerns in more detail. We started a podcast and one of our first guest was a builder and he recommends spray foam. We are hoping to have future guest that we can dive into more detail on topics such as this.

Just finished my 32x80 two story. Spayed entire interior with foam. I'm in central Indiana. I heat it with a match. It's unbelievable. Heat seldom comes on . The key is ceiling fans. Have to keep the air circulating. I figured I saved forty percent over stick built. This is mt third one. I'll never build anything else. Good luck with yours.

You can ask any of our clients and they would tell you the complete opposite. While that may be the focus of some lenders that you have come across, we help our clients align their financial goals with their housing goals. In Michigan there are a lot of lenders that do not finance barndominiums, we didn't invent a problem. We created a KZfaq channel to provide FREE information, so people can be educated and informed on one of the largest financial decisions in their lives. If someone has questions or they do want to finance with us, because they trust us and that we act in their best interest, that is their choice.

We appreciate your candor Ian! Best wishes on your Barndo Project and we hope information we provide can give you additional insight!

The most common challenge you will face will be similar to initial construction issues when it comes to financing, which is appraising the value. The number one difficulty may be finding comparable houses to appraise the value of your barndo. Another problem is that it may limit the number of potential buyers. Here in Michigan, there are still a lot of banks/credit unions that do not finance barndominums. Even if you own outright with no mortgage, it comes down to the buyer side of things (if they are financing the purchase).

I wouldn't sweat it with the amount of manufactured money in circulation there's tons of people that have plenty of cash to pay cash for the properties and do

@@ALT_RIGHT that is a valid point. We have seen an increase in cash offers. Especially if someone had a lot of equity in their house and sold recently. The downside to relying strictly on cash offers, is it limits the potential to attract even more buyers. More buyers looking at a house is a good thing. Better chance at getting multiple offers, which increases the likelihood of selling over list price.

Unfortunately, we do not provide USDA Loans on barndominiums so I am not familiar with availability and/or potential loan terms.

Unfortunately, we don't know any builders in Alabama.

That is definitely one of the top problems. We have a video on our website that talks about this issue. Finding land is one thing, but there are lenders/townships/etc. that can have restrictions where you can and can't build barndominiums. Here is the link to the video >> www.mykalamortgage.com/barndominiumfinancing (Module 1.6 and 1.7)

@@barndobankers Thank you very much, unfortunately, nothing said about Permits to Build, cities, States that allows building, example: want to build in North Arizona, North Nevada, sad to see the Manufacturers have no specific info. cash deal :-)

@@ZorroDaddy if you need information about permits, we highly recommend talking to a licensed builder in one of those areas before any bank or credit union. In Michigan, it is the builder that request building permits and not the lender. Permits and other regulations vary so much from state to state, even township to township. We mostly originate construction loans in Michigan and Florida, so we're sorry we can't help with finding a builder that can assist you with questions pertaining to permits, etc.

@@barndobankers Thank you, be well 💯

No it's not I have all the land you need

Did you watch the video? Never mentioned that refinancing wasn’t an option for barndominiums.

Clickbait

@@EinsteinTeachedYou Financing a barndominium has it challenges. At least in our area, there are limited number of banks/credit unions that will finance a barndominium. So, a problem that no one talks about is....refinancing.

In all actuality if people stop using the term barndominium and just say custom home there is no problem.

Most common construction type of a house is a foundation with a crawl space or a basement. Most barndominiums are built on a slab with no basement or crawls space. This poses a challenge to finding comparable houses for banks to estimate the value of the construction of a "barndominum". Also, most barndominiums are post frame construction, compared to standard houses that are 2x4 or 2x6. No matter the name of the style of the house, the banks look at the way the home is constructed.

@@barndobankers So, essentially it's because Banks don't understand construction? Post frame is just as strong, if not stronger than traditional framing. It also insulates better, with less thermal bridging, which equates to better energy costs. Also post frame uses the same 2x lumber that traditional homes use, it's just assembled differently. Also, here in California almost all homes are built on slabs. In fact I've never seen a home here with a basement because they are extremely rare.

@@Soleya9 In the past, post-frame construction or “Barndominiums” were not as common in the market as they are becoming, so lenders did not have available data on the potential marketability of the home in the event the home were to be foreclosed and the property had to be listed for sale --- in other words, they were uncertain over the predictability or stability of the collateral to their loan. Today, we have comparable sales and more data to utilize and better determine the stability of value pertaining to the home as collateral. Unfortunately for the public, many lenders are slow to interpret and utilize that data OR they are just choosing not to operate in the “Barndominium” arena. So to clarify, I don’t think that it is “because banks don’t understand construction” - instead, it is a matter of loan integrity/data interpretation and/or a choice to lend in this type of specialized market.

It is my understanding that it is due to the structural difference between a barndo and standard home. A barndo has all of its load-bearing walls on the exterior, while a traditional home is more evenly distributed with its load bearing walls being both interior and exterior walls. Conceivably, lenders and insurance carriers would perceive the barndo as a riskier design.

It's always good to minimize debt! However, paying all cash is not a possibility for a majority of people.

Yes correct but I been in my current home 21 years home has 400k in equity so when I sell it this how I can buy one if the land and build makes sense debt is the only thing that keeps people working period

​@@jamesray3920 I am happy for you! That is a great feeling to have the option to pay cash for the next home if you want to go that route. The first dream is to own a house, the next goal is to be mortgage FREE. However, how do first time home buyers buy/build a house with all cash? Or even a person that owned house for the last five years? There are ways to pay for a house with all cash and you stated two of them, time and equity. Not everyone is in position to have the option to pay all cash. A mortgage might be their only option, since they don't have equity in a house. That is why we try our best to help our clients align their housing and financial goals. Debt- This would be a long discussion in itself haha. It's more than just debt that has people working long past retirement age, second jobs, etc. Thank you for comment and I wish you the best!

Building equity all has to do with where you buy a home period, my home was 150k with 21k in upgrades now has a value of over 500k all new build start out at 400k to 1 million unbelievable that people would buy such a home where your neighbors are a few feet from your home , no guarantee I will buy another home but if I do I will pay cash for it and the land but I did just buy a Mercedes Benz sprinter van to build out I may go this route and just travel im 58 life becoming short we are here today and gone today so why leave for your children to blow why not you any home you buy cash still will have bills to pay taxes & insurance for myself I just want to be truly debt free , less is more and enjoy the most simple things in life a nomad lifestyle 😊