Tiny homes (under 500 sq ft) are booming as an affordable housing solution, but financing them is tricky since most traditional lenders won't write mortgages under $100,000.
Financing Options
- Personal loan: $25K-$100K, 7-12% rate, 3-7 year term
- Chattel loan: for homes on wheels, 8-14% rate
- Builder financing: some tiny home companies offer in-house loans
- USDA loan: if on permanent foundation in rural area
- Home equity loan: if placing on owned land
The best strategy: if you own land, place the tiny home on a permanent foundation to qualify for traditional mortgage rates. Homes on wheels are considered personal property and carry higher financing costs.
