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Can You Get A Home Loan For A Tiny House?

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You have your sights set on a more reserved, more efficient lifestyle, so those monstrous traditional homes with tons of square footage simply aren't for you. Making the decision to jump on the tiny house bandwagon and drastically change your living situation can be a huge move, but one that is well worth the change for most people. The one tricky part of investing in a tiny home is that you may not be able to get the same home loan opportunities. Here is a look at some of what you need to know about obtaining home loans when you want to buy a tiny house. 

Some tiny home dwellers get funding through RV financing institutions. 

Because tiny homes are often deemed as mobile homes or more like recreational vehicles, some prospective buyers have to go to different financing institutions to get the money they need. One alternative funding option may be with a lender who offers loans for recreational vehicles. As odd as this may seem, RV lenders are often willing to take on these loans because traditional financing options don't quite fit the purpose. 

More traditional lenders are creating home loan packages for tiny homes. 

Because tiny home life is becoming such a popular movement, there are more traditional lenders out there now that do offer some kind of financing for a tiny home. Some lenders are hesitant to fund the purchase of a tiny home for a few reasons:

  • Tiny homes may not hold their value as well
  • Tiny homes may not be as easy to insure for protection
  • Tiny homes are most often mobile homes 

While finding financing can be a little tougher than if you were buying a regular-size house, if you shop around a little, you may be able to find a lender who will work with you. 

You may not have to get a mortgage loan to buy your tiny home. 

Just because you cannot get a home loan to make your tiny home investment, it does not mean that you cannot get other loan types that may work. For example, you may be able to get a personal loan or title loan through a lender if the tiny house will not qualify for a traditional mortgage loan. With these loans, the property still stands as collateral for the loan, and because you don't need as much money, the smaller loan types can fit better.