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Financing Overview Print E-mail

Financing of Dome Homes

FINANCING UPDATE – As of March 3, 2014, Sovann Kang has moved back to Wells Fargo Bank and can now offer construction loans on domes, new home loans on domes, buyouts and refinancing on existing domes for those who qualify. Sovann told us that Wells Fargo will now accept appraisals on comparables based on square footage, bedrooms and interior finishing qualities. Comparables no longer have to be based on domes  being built in that area! This is a huge advantage when trying to obtain any form of dome financing.

To qualify your credit score has to be 680 or better.  If your credit score is 680 they require 25% down with 10% Post Closing Liquidity (PCL). If your credit score is 700+ they will require 20% down with 15% PCL. He is a Home Mortgage Consultant and a Construction/Perm Specialist - NMLS #  275454. His contact info is:  Sovann Kang: Cell:  253-376-0991;   This e-mail address is being protected from spambots. You need JavaScript enabled to view it

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To view other alternatives than using a lender;

like family financing, equity loans on property, stage financing, etc. read our financing booklet.

To view it on line, please click on Financing Booklet.

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Conventional mortgage lenders tend to be ultra conservative when considering a dome.  
  • Mortgage brokers, small local banks, local credit unions or indirect sources for financing may be more flexible in loaning on domes.
  • Refinancing other property or acquiring loans from other sources may be easier while avoiding the restrictions and requirements of conventional construction loans.
  • Another popular option is the pay-as-you-go method. Combined with partial financing, this can get you into your new dome.

Financing is the single biggest hurdle to owning a dome home.  Lenders are very conservative and want a large down payment typically 25% to 40% of the finished price of the home.  What is the cost per sq.ft. to build a conventional house in the area that you will be building?  Let's say it is $85 a sq.ft. and if you want to own a 1,500 sq.ft. 36' dome.....then the finished price (includes Dome Building Kit Cost) will be around $127,500.  The lender will want $32,000 to $52,000 down.  They will accept some of the equity you have in your land towards the down payment...but typically they want a big cash down payment, too.  How does this fit in you budget? 

After you learn the cost per sq.ft. to build in your area, use the above scenario to calculate what size dome you can afford the 25% to 40% down payment...it may be that you need to start out with a small dome and later convert that dome to a rental apartment, garage, mother-in-laws quarters, etc. and add on a larger dome later.  Or you may want to build the dome and install the second floor later, when you can afford it.  Second floors can range from 400 to 1,200 sq.ft.  And if your building costs are $100 a sq.ft. then this will save you $40,000 to $120,000 on your finishing costs.  This way you are at least living on your property in a super-strong, super-energy efficient dome home...saving money month to month on your heating and cooling costs and later add on a larger dome or install your second floor.

Even before the mortgage melt down it was hard for our clients to obtain financing...it is even harder now.  The best places to try are mortgage brokers, small local banks or your local credit unions.   Right off the bat let them know you want to build a concrete dome and show them our web site. Before you invest very much time with each lender assure that they will loan on a dome home.

The United States Department of Agriculture has an agency for Rural Development.  To learn about the program, click on USDA Rural.  To locate your local USDA agency, click on USDA State Locations.

For a helpful, in depth look at financing read American Ingenuity's Financing Your Dome Booklet which can be downloaded by selecting financing

Why do lenders not like domes? Lenders determine how much they will loan based on what houses in that neighborhood sell for. The lender can usually get within three to four per cent of the value of a conventional house. But because we do not have resale statistics on domes they do not know what the resale price is. The lender has to be concerned with the worst case scenario. If the homeowner dies, they will have to resale the dome. So they are reluctant to loan as much money on a dome project.

Dome Resale Value: We know of only a few of our dome owners who have sold their dome; which is a compliment in itself. Therefore, we have no resale statistics on our dome, but we have heard of other domes being sold at a profit well above their initial building cost. We can offer some insight that would apply.

  1. Geodesic domes being unusual, they will not appeal to everyone and it will likely take longer to find a buyer.
  2. Energy costs are certainly increasing and therefore a very energy efficient home will increase in value as energy costs increase.
  3. A conventional home will show its age as styles change while a new coat of paint on our dome will still look ahead of its time.
  4. Our sales of dome kits has constantly increased through the years and a quality dome that is completed would have the distinct sales advantage of showing the finished product.
  5. The resale value of a dome or any other home, is improved when it: a) matches the neighborhood in size and value;  b) exhibits quality construction;  c) is landscaped well; d) offers advantages over other homes.

Also, with the increasing popularity of domes and rising energy costs, the market for an exceptionally energy efficient, super strong, low maintenance home should be excellent. A large percentage of the home buyers cannot visualize a dome and do not want to be involved in the floor plan design and construction of their home. As a result a finished dome that can be touched and felt is a big plus to them. If you are thinking of resale, build at least a 40’ in diameter dome, have it built with quality workmanship and keep your utility bills.

To learn more about how to obtain financing on domes, click on Comparables. 

US DEPARTMENT OF AGRICULTURE:

RURAL DEVELOPMENT CRITERIA

To learn about the loan programs that the United States Department of Agriculture has for rural areas through their Rural and Community Development department, click on Housing and Community Facilities Programs (HCFP).   The following info covering Direct Loan Program, Loan Guarantee Program and Mutual Self-Help Housing came from Agricultural Department's HCFP file:

Direct Loan Program (Section 502)

Under the Direct Loan program, individuals or families receive direct financial assistance directly from the Housing and Community Facilities Programs in the form of a home loan at an affordable interest rate.

Most of the loans made under the Direct Loan Program are to families with income below 80% of the median income level in the communities where they live. Since HCFP is able to make loans to those who will not qualify for a conventional loan, the HCFP Direct Loan program enables many more people to buy homes than might otherwise be possible. Direct loans may be made for the purchase of an existing home or for new home construction. To learn more details about this program, click here.

Loan Guarantee Program (Section 502) 

Under the Guaranteed Loan program, the Housing and Community Facilities Programs guarantees loans made by private sector lenders. (A loan guarantee through HCFP means that, should the individual borrower default on the loan, HCFP will pay the private financier for the loan.) The individual works with the private lender and makes his or her payments to that lender.

Under the terms of the program, an individual or family may borrow up to 100% of the appraised value of the home, which eliminates the need for a down payment. Since a common barrier to owning a home for many low-income people is the lack of funds to make a down payment, the availability of the loan guarantees from HCFP makes the reality of owning a home available to a much larger percentage of Americans.  For more details about this program, click here.

Mutual Self-Help Housing Program (Section 523)

The Mutual Self-Help Housing Program makes homes affordable by enabling future homeowners to work on homes themselves. With this investment in the home, or "sweat equity", each homeowner pays less for his or her home. Each qualified applicant is required to complete 65% of the work to build his or her own home.

Technical Assistance Grants and Site Loans are provided to nonprofit and local government organizations, which supervise groups of 5 to 12 enrollees in the Self-Help Program. Members of each group help work on each other's homes, moving in only when all the homes are completed.

Once accepted into the Self-Help Housing Program, each individual enrollee generally applies for a Single-Family Housing Direct Loan (Section 502).   For more details about this program, click here.

The following are lenders to contact about obtaining financing on geodesic domes; if you get no responses then contact your local mortgage brokers or your local small banks or local credit unions.

Mountain Classic Mortgages, Connie Giffin info:

  • Connie charges a broker fee of 2% for construction loans out of Colorado or New Mexico plus the lender, title fees, etc.  Fees depend on the specific lender.
  • Connie states: "I am passionate about promoting equal financing for our "earth friendly" homes. I therefore put many, many more hours into my loans than I do conventional housing but charge my client's very little more for all my time. I have lenders who will now offer the same programs and interest rates on my domes as on conventional - a big step forward for the industry. In 2007 I will be making a nationwide effort to promote "earth friendly" construction and financing.  I work with over 50 lenders who provide hundreds of programs. With all of these programs to choose from, we will select the mortgage loan that offers the best rate, term and fees to meet your individual needs."

FLAGSTAR BANK JASON GIDEON, M.B.A.

E-mail: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Cell: (248) 761-0254 or toll free: (866)-372-3597

38200 West 10 Mile Rd. Ste. 204;    Farmington Hills, Mi. 48335

Jason States:  "I am an entrepreneurial management consultant and "green" building/dome home enthusiast who specializes in new construction and government (FHA/VA) lending. I'm well-versed in the FHA 203H Loan for those who lose their owned or rented primary residence to disaster. I lend in all 50 states and U.S. territories (e.g. Guam, Virgin Islands, Puerto Rico) and I charge no additional commission for government, construction or dome projects. Enabling customers to build strong, efficient and "earth-friendly" housing is my highest priority." 

 

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