Financing Options for New Log Homes
Though certainly no small task for most, securing the financing funds required to pay for your log home project is certainly not insurmountable thanks to the numerous log home financing options available today. In fact, log home financing options have greatly expanded over the last few years, despite the claims of naysayer's (see Log Home Myths). The following information, courtesy of The Log Home Council, discusses recent developments within the log home financing market.
All home buyers probably ask themselves the same questions. If I build this house, will it increase in value? If the need arises, will this house sell in a reasonable amount of time? In the case of log homes, yes is the answer to both questions.
Log homes continue to appreciate and sell well, according to Nathan Prewitt, president, First Fidelity Equity Corp., Greenville, S.C., a mortgage broker. He says, "Log homes are the fastest growing segment of the custom-home real estate market today. They do extremely well compared to the appreciation and resale of other types of custom homes."
The whole value picture for log homes has changed dramatically during the past 15 years. Log homes have gone from being country cabins to being primary residences. Almost 90 percent of these houses are their owners' primary home and 84 percent are built in or near metropolitan areas. However, because log homes are specialty houses, buyers still face a more complex financing situation than do buyers of conventional site-built homes. Still, as log homes have become more common and their perceived value has improved, they have become easier to finance.
Another major event also makes mortgage lenders more willing to underwrite log homes, according to Gastineau. In November, 1992, Fannie Mae eased its comparable appraisals requirement in favor of unique and special house. This mortgage classification includes log homes.
The old rule required a log home's appraisal be based on the sales prices of three comparable log homes sold in the same market in the preceding six months. Finding such comparables was next to impossible in areas where log homes hadn't been built or sold within the previous six months. Under the new directive, when direct comparables aren't available, Fannie Mae will accept appraisals based on three other types of unique, special or rustic houses in that or a competitive market, as long as the appraiser' s decision is based on sound judgment and is supported by current market data. Fannie Mae wants to be sure the market area accepts unique or non-traditional types of houses. In other words, it wants to be sure the house will sell if the buyer defaults on the mortgage. A concerted effort by LHC convinced Fannie Mae to make this change. It gives log home buyers a deep pool of mortgage funds from which to obtain financing.
In keeping with our unconditional commitment to servicing our clients, Avalon Log Homes offers a comprehensive financing assistance program designed to help prospective home owners source and secure appropriate financing solutions. For complete information on our Financial Assistance Program, contact an Avalon Representative online or by phone at 208-463-8668 today.