Mortgage for off-grid homes

[Gresford]

I spoke to a realtor out in eastern Washington yesterday. DW and I are considering a real estate purchase in that area. One of our desires is that the home be off-grid. When I expressed this desire to the real estate agent, he informed me that most lending companies will not mortgage an off-grid home. He also stated that there are lending companies that specialize in these types of homes but he was unable to recall any of them.

Does anyone have information about such lending companies or if what he was telling me is true at all????

Thanks!

[goatlady]

Your realtor speaketh the truth - you will need what's known as an "In-house" loan from a local bank IF you can find a bank to do a loan on an off-grid nonconventional home. The bank lending policies really preclude such loans - they always look at the resale value in the event of a foreclosure and banks loan on properties that will have a fast turnaround time. You will also most likely have to pay a higher interest rate than for a conventional home. Lending institutions do NOT promote out of the box thinking/building.

[Deb862]

Yes, I agree with goatlady. When we lived in Idaho and were searching for property, several off-grid properties interested us, however, we found the same thing. No area lender wanted to loan on such a property due to resale, comparables, etc. If the property is cheap enough you might be able to get a personal loan for the purchase but this will require excellent credit, too.

One option that we eventually used was that we bought 20 acres of off-grid land, built a house ourselves, and then took advantage of a program the State of Idaho has for homeowners that have no way of getting electricity to their home (or it would cost more than a certain amount to get the power there). This program offers an extremely low interest rate loan (4%) to purchase a complete off-grid system of your choice, taking into consideration how much debt you also can afford to take on. It was an awesome program and set us up with a real nice solar system, complete. If you think this might be an option for you, you might want to check with your state to see if it is available. In Idaho, I think it was through something like the Idaho Dept of Water Management or something? (sorry, it's been a few years!).

[labrat]

Gresford, a coupla’ years ago when I was first considering the same vision as you are now faced with, I did a search of available financing; while I have not been able to fulfill my dreams as yet, I did bookmark the info for future reference, just in case I was in the position to do so. Needless to say, this link might be of some help for you. The site is primarily geared toward Montanans, but there is some info appropriate for national consideration.

http://www.off-grid.net/index.php?p=616

Check out the borrower’s guide and the EERE links.

[sisterpine]

Greetings from the middle of nowhere Montana! We mortgaged our place a couple of years ago. Finding a lender for a totally off grid remote home was quite a chore. I am not sure which was more of a problem, the "off grid" part or the "remote" part. In any case we did eventually find a mortgage company but ended up paying an extra percentage point due to our "situation" The company who granted our mortgage is WMC Morgage Corp. Perhaps contacting them or having your broker contact them will be of some help. Sis

[labrat]

I forgot one thing; one of my problems when I tried to finance my cabin (not only was I off-grid, I had no "legitimate" water source and no electricity), the real problem with the mortgage was that I was more than 500 feet from a hydrant, thus I could not procure insurance; that killed any traditional funding for the mortgage.

[sisterpine]

OOPS- you are right labrat, I should add that the nearest hydrant is about 25 miles away, we were hauling water from a spring, we have no septic (graywater) do have a compost toilet and the nearest fire department is 22 miles away, down summer only roads and is strictly volunteer--yet with perseverence we did get a mortgage! And we heat only with wood.

[katlupe]

What about finding property with owner financing? We bought our off the grid home that way. Many times, the type of property, us homesteaders, are looking for, is the kind that a bank or traditional lending companies, will not go for. The only way the owner can sell it, is through owner financing. Plus, they make more money on it that way. So it's good for them, and good for you.

katlupe

[Gresford]

Thanks everyone! Needless to say it seems like we have our work cut out for us. But you have all provided a starting point and for that I am grateful!!