I received a great email from a company that has been working on getting financing for Tiny Houses in their many forms. I am sure it has been a hard battle and others have been trying as well, but it appears like she feels confident that they will succeed. I have posted her email below with the link to her email so you can get on the newsletter she is preparing to announce this for those who need financing to buy a tiny house or an Organic Cottage one day.The illusion of space, like freedom, is that you can fit into the lifestyle comfortably. Before you commit to a tiny space to live in, take out a loan for a house you do not know much about, or particularly where you will put it… you might wish to read on and learn of the potential issues along the path to such a life of paradise.
While I am sure there will be many conditions to meet so the loan program is not harpooned coming out of the chute by defaults, there is really nothing in the financial markets now that earnestly supports the downsizing movement. Who ever comes out of the starting gate with a great program will have some 40,000,000 Baby boomers and millennials looking to stay warmer next winter, amongst other reasons for shrinking the costs of survival in the future.
The most important factor to consider when the financing window opens is whether you get a great house or else you will simply owe a bunch of money for a lemon you may not want to or be able to live in and thus risk destroying your one chance at a home by ruining your credit. You will still be required to pay even if you have to bail out on a house that is toxic, falling apart within a few years, or one that is not allowed to park anywhere near the places you need to be to work, survive, and pay for it. Presently there are people who have taken out RV loans and other financing that have found themselves unable to put the houses where they thought they would, hook them up to utilities for full time living, or having to vacate due to the outgassing of formaldehyde, plasticizers, vinyl EDC’s, and other air quality issues that impacted their health and forced them outside.
While I applaud the chance to get loans, this is not the time to forget due diligence, to research the product you will live in, and how you will pay for it as they tend to run more than $50,000 for the smaller versions, let alone the sizes that most people want. That appears to be closer to 500 -650 square foot range than the 250sf most traveling houses are coming in at from the mass producers. If the builders are not paying attention to the fumes from within the box you will live in, you must be the ones that exercise the due diligence and protect your loved ones from the issues you could be facing in a house that you commit to pay for long after these things are learned. Please, simply take the time to investigate what you should be asking questions about, like the air quality, but in order to know that the right answer is, I have created a couple of blogs on these subjects to help you discern what you should be looking for as you finally get the chance to invest in a downsized home of your dreams.
Here’s the update for the National Tiny House Financing Company -applications will be available beginning between March 1st and the latest is in May. Insurance availability is also a barrier being resolved. I know all of us want this now (Just like you – my business, livelihood & where I live depends on this!) but we need to consider this company is solely dedicated to tiny houses without the barriers we faced through other lending attempts. They are actually working at lightning speed compared to the formation of similar companies. Remember we just received the “Yes” in December for this company. The encouraging news is the investors have enough money to cover as many qualifying loans as we request. I will not send you false promises – this one is REAL. As soon as I know the details of these qualifications I’ll update you. I’ll have a tiny house shopping website created this month that will have “my preferred builders”, tiny house products, tips to improve your credit scores, loan updates for this new company, resources to link buyers, land available (both private & developments) cities with favorable codes, etc. This will allow buyers & builders to search by location. I’ll email you the link for this site this month. I have most of your email addresses but you can reply to this text firstname.lastname@example.org with your email address to ensure I have all of you on this MailChimp list. Hang in there a bit longer. It’s very hard for me to wait! I know many of your situations & I can’t wait to see loans across the country change this industry.
Congratulations on a hard road to financial support for the Tiny House industry that is sorely needing paving. The variables are many but getting from the RV loans to legitimate Organic Cottage sized loans as well with some variations on conventional construction is good as well since few of the tiny houses will meet those guidelines or codes. The insurance added a thick layer as well given their propensity to not want to take on liability in return for premiums. I believe, if the houses are constructed well and have more longevity than the trailers or tiny mobile homes one wheels promise at the moment, the long term potential is good. If the initial loans are made to some of the poorly constructed, “made for the road” toxic boxes that will be pulled by undersized trucks, ignoring the high centers of gravity, the magnetic brakes, aged tires, and other variables then such a policy will wreak havoc on the loans and insurance returns. I want these addressed in advance so as to increase the likelihood of their success.
These are important issues as you launch a venue for financing that is sorely needed. I hope the investors and you are fully aware of the dicy situation that is being created with the construction techniques which ignore oxygen levels and quality in the houses, toxins outgassing causing serious health issues in occupants, and thus anticipate some of that so as to insure your success over the long run. If not, please refer to the blogs I wrote on these subjects that address them so as to dodge the traps being laid for sake of profits without due diligence. The first article is about the lack of whistleblowers at the industry conventions, or discussions on the panels
the air quality issue is another article worth reading to understand better.
The maintenance of tires, brakes, a truck one needs to move them, and the cost of a trailer to constrict a house on, as well as construct seems like more, not less to waste money on and thus be bound to the cycle of endless maintenance, licensing, and upkeep.
I believe that the Pure Salvage Living Renaissance will play a big role as we tighten our belts and look for the low cost alternatives to healthy sustainable housing construction using American labor and virtually no imports. Perhaps the government will get on board at some point and make it easier instead of harder by supporting those doing the Research and Development needed to make this a smart and lasting transition in our society.
Tiny Texas Houses
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Below is the advise I gave to Sheri when she started on the venture:
I wish you well on your endeavor. I hope it will not be limited to the RV class of tiny toxic new materials houses (See Whistleblowers article on my website) which seems to have been the only trend in the last decade. I am not a fan of them and write of their inherent health issues as a whistleblower in that industry.
I do condone building sustainable toxin free sustainable houses out os 95% Pure Salvage and no imports, thus not making it a conventional method and thus I hope you find the loans for quality built House Art such as mine which would be a better bet for a lender, as they will last for a century instead of a decade and not make people sick who live in it while it outgases. (Yes, I have some strong feelings about making kids sick for lack of good air in these boxes on wheels they are passing off as houses.)
I will not likely want to build and sell more than 4-5 houses next year but if there were financing on them, the 43 acres I have that I am developing for Organic Cottages would be a good location for them and I would have buyers. If kept in Salvage, Texas, the lenders would be assured of access and likely a quick resale in the event of a default. I have some land free and clear of loans and some with bank liens, but the houses themselves do not need to have land to have a loan in your format, just a UCC1 access right and homesteading agreement that allows for such repossession.
If you can help make that vision come to fruition, you will be a hero in the eyes of millions who become PSO members and thus not only learn life skills, have spaces to store salvaged materials, build with them, and create resource banks that combine the young and old as a community to teach, share, and help each other rebuild America. To do this with the treasure our ancestors left us and help preserve the world we leave to the next 7 generations, well that is an accomplishment that will take people like you to bring together the banks and the solutions under one roof. A new form of bank where the resources are not fiat currency, but building materials that would cost us far more to make than salvage, and the wood can no longer be found.
Hopefully, as a tiny house consultant I am opening pockets of information that will help some of your clients as well. Please let me know if I can be of more help.
Tiny Texas Houses