Anyone know of a lending institution that has experience in financing for log homes. My wife and I are ready to pull the trigger, but was recently turned down for a loan not because we weren't approved but my builder was not approved. I've never heard of such a thing. We actually submitted a second builder to the loan company and again was turned down because "he hadn't done any construction in the area." I had heard that obtaining financing for a log home was dificult but I had no idea I was going to have to go through this.
I'm not aware of any dollar limit. It was never mentioned to us. It is more expensive to build a log home than a stick built house and FCS is aware of this. They loaned us the money to buy the property and build the house. FCS is just like any other lender. They consider your debt to income ratio and then loan you what they conclude is within your budget and considering their risk.
We considered two other banks, but finally went with FCS. The underwriters are fairly stringent. To go through the process with the underwriter was sometimes maddening but they finally agreed to the money we needed.
I would give the FCS representative a call in the Missouri area where you are planning to build to get best information.
If I think of anything I will let you know here on Log Home Neighborhood.
My husband just reminded me about one other thing. We wanted initially to put 20% down on the total loan, but the underwriter for FCS wanted us to only put down 15%. Odd huh? We decided we would go with that, but then put 5% more down and reamortize after the house is completed. The loan officer in the local office is going to work with us on that detail.
We've actually got our land paid for, and want to start the building process. With our last lending institution we were thinking of 20% down as well, but this bank wanted 30%. And as I mentioned earlier, had contingencies on our builder. Did FCS have any thing to say about what builder you used?
They didn't have a problem with the builder because they already have had many dealings with them. Our builder is Daniel Boone Log Homes. I'm not sure if Daniel Boone builds homes in Missouri, but they probably do. their website is www.dblh.com. If you call talk to Keith Parker.
Hi Dave, we went through Wells Fargo 16 years ago and had no problems. Not sure if they still do them or not but a place to start, goodluck
Huh? That's strange...Actually Mary, I did not mention the name of the institution in my "intro" discussion, but Wells Fargo is the bank I was referring to. They qualified us for "construction" and final mortgage. The problem they had on the "construction" side was they didn't qualify our builder. The first builder we offered had built 15 log homes in the area, but had a blemish on his financial statement. The second builder we offered did not qualify because, even though he had plenty of log home construction experience, and no financial blemishes, he hadn't built any in the area. They also wanted a 70/30 loan to value. Plus, 10% of the construction cost, plus the cost of the log home package, set aside in cash. So now we're trying to find a bank to do the construction loan seperately. Hopefully, they won't be so stringent on who we pick as a builder.
Yes...Exactly! This is why I wanted to start the discussion. Thank you. And Good luck to you as well?
Did you check to make sure your property is outside the city limits? I called the Farm Credit office here about another person we know who is building a log house. The representative told me their property is in the city limits and that is why they didn't qualify. Our friends had called the office but the rep didn't really explain why they didn't qualify. They just told them pretty much the same thing they told you without any explanation. The land must be in the county rather than in the city limits.
Sounds like you are getting the run around.
We went to the log home show in Nashville last year. There were several banks which had booths. One was US Bank. We talked to them and found they are willing to make construction loans. If you have a US Bank in your area you could talk to them.
Again, good luck.