Bank Financing for off-grid cabin?

[DOGMAN]

I am about to make a big-move. I am downsizing from a 22 acre property and remote house (with electricity) to a 3 acre parcel with a small off-the-grid cabin (that is closer to town, but yet more isolated) and I need financing.
My bank approved me- no problem on the amount...but once they found out the cabin was off-the-grid they became hesitant.

The cabin has newer solar panels, a diesal generator, propane, and a phone line, but not basic utilities. Anyone with experience financing such a place?

[crashdive123]

I do not, but good luck Dogman.

[Rick]

Dogman, ask your banker what his/her concerns are. They have to consider the possibility of you defaulting (whether you will or not) and how they will handle the property should that occur. Since not everyone wants to live off grid their options are narrowed to a specific market segment. Not a good thing in their eyes.

Perhaps you can work out something with them to put their mind at ease. Identify how close utility hook ups are and what the ball park costs might be. Something along those lines. But I'd talk to the banker to find out what their concerns are then try to find some way to mitigate them.

If power is close enough you might even have it run in to the property but not hooked up. Obviously, depends on costs. Just a thought.

[kyratshooter]

In my area you will get no more than the value of the property financed. Possibly the value of a storage/farm building also, but not a residence.

Foundation approval, construction and zoning inspections that were never done.

There are considerations you have not even imagined. For one thing, it is illigal to house children in a structure without running water and bathroom. The health department in most areas can have you evicted for not having basic utilities. Transporting waste to another site is illigal and dumping untreated waste is illigal, even in an outhouse. A person living without basic utilities is eligable for government emergency housing. And housing without utilities can only be zoned as recreational property and residency is limited to 100 days per year.

In my area it was impossible to get financing on a house with a tin roof until the last credit bubble.

My wifes estate was having problems financing the house for half the appraised value just two months ago, and it was in the midst of suburbia. Banks are taking ZERO risk right now.

[DOGMAN]

In my area you will get no more than the value of the property financed. Possibly the value of a storage/farm building also, but not a residence.

Foundation approval, construction and zoning inspections that were never done.

There are considerations you have not even imagined. For one thing, it is illigal to house children in a structure without running water and bathroom. The health department in most areas can have you evicted for not having basic utilities. Transporting waste to another site is illigal and dumping untreated waste is illigal, even in an outhouse. A person living without basic utilities is eligable for government emergency housing. And housing without utilities can only be zoned as recreational property and residency is limited to 100 days per year.

In my area it was impossible to get financing on a house with a tin roof until the last credit bubble.

My wifes estate was having problems financing the house for half the appraised value just two months ago, and it was in the midst of suburbia. Banks are taking ZERO risk right now.

It has running water (a well), an approved septic system, two bathrooms, and electricity...just not grid provided electricity. It has been a primary residence for the couple living there for 27 years, they raised two kids in it...I am having no issues with ordinances or laws...only financing

[Camp10]

Good luck Dogman! The insurance companies here are making some financing difficult as well. Many of the service upgrades we do at work are because the place sold and the insurance companies require a new breaker panel (instead of the old,reliable fuses) The other sticking point here seems to be wood heat. I dont know if the bank's concerns are the same but they might be tied together.

[Rick]

Camp10 may well be right. If a water claim has been made on the property any time in the last 7 years it is definitely in the C.L.U.E. database. Only the homeowner, insurer and LENDER can access the database for that property. Ask the homeowner for a copy of the C.L.U.E. report. If water claims have been made (think MOLD) then you may not be able to get financing or insurance on the property.

https://www.choicetrust.com/servlet/...chor=undefined

[DOGMAN]

thanks guys. I will be talking to my lender today to pinpoint exactly what the concerns are, and then try to address them and look for some non-traditional mortgage companies as well who finance off the grid homes