Unique properties
Log homes, domes, earth-sheltered houses, converted churches and barns: lenders like them less than buyers do, mostly because of the appraisal.
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How do you finance a unique home like a log or dome home?
Unique homes such as log, dome, earth-sheltered and converted homes can be financed, but the hurdle is comparable sales. If an appraiser can find similar homes that sold nearby, many standard programs work. If not, portfolio and non-QM lenders that weigh the property on its own merits are the route.
On this page
Improving your odds
- Gather sales of similar unique homes in the region
- Have permits and certificates of occupancy for conversions
- Expect a larger down payment where comparables are thin
These are the situations where shopping more than 180 lenders matters most: one lender's "no" is often another's standard loan. Tell us about your situation.
Use a free calculator, or get your HELOC rate from Shawn.
Common unique homes
| Type | Typical lender question |
|---|---|
| Log home | Are there log-home sales nearby? |
| Dome or earth-sheltered | Is the design accepted by appraisers and insurers locally? |
| Converted church, barn, school | Is it permitted and zoned residential? |
| Container or tiny home | Is it on a permanent foundation, with a certificate of occupancy? |
Borrowing against a unique home
The same appraisal question applies to a HELOC. Lenders that use automated valuations often can't value unique homes, so expect a full appraisal.
What counts as unique
- Dome, earth-sheltered and container homes
- Log homes and timber frames in areas with few similar homes
- Very large or high-end custom homes
- Historic homes with preservation restrictions
- Homes with unusual layouts or significant unpermitted additions
Helping the appraiser
Give the appraiser a list of improvements, the builder's specifications, and any sales of similar homes you know of, even farther away. Appraisers can use more distant or older sales for unique properties if they explain why. An appraiser experienced with the property type in your area makes a big difference; ask the lender whether they can request one.
Unpermitted work
Appraisers usually give little value to unpermitted additions, and some lenders won't lend if the work is significant or unsafe. Getting work permitted retroactively, where your city allows it, can raise the value and widen your lender options.
HELOCs on unique homes
Automated valuations rarely work, so expect a full appraisal. Lenders may cap the line lower. A portfolio lender that keeps loans in-house often has the most flexibility.
Example
A custom modern home on a large lot in a neighborhood of older ranch houses. An automated valuation fails, and the first appraisal comes in low because the comparable sales are all smaller homes. The owner provides sales of two similar architect-designed homes in a nearby town, and a second lender's appraiser uses them to support a higher value, enough for the line she needs.
Also asked
Will a unique home get a lower appraisal?
Not necessarily lower, but it's harder to support. If the appraiser can't find similar sales, the value may lean toward the conservative end, and some lenders won't use the result at all. An appraiser who knows the property type helps.
Do portfolio lenders charge more for unique-home loans?
Usually, yes. Portfolio lenders typically charge somewhat more than standard programs, in rate or fees, because they keep the loan and take the risk. For a home standard lenders won't touch, the access is often worth it.
Can I get a HELOC on a log home or dome home?
Yes, some lenders offer a HELOC on a log or dome home if it's a primary residence with year-round access and enough comparable sales. Expect a full appraisal and possibly a lower loan-to-value cap.
What paperwork helps a unique-home loan?
The most helpful paperwork for a unique-home loan is building plans, permits, the builder's specifications, a dated list of improvements and any past appraisals. Anything that helps the appraiser understand the home's quality makes the value easier to support.
Are unique homes harder to insure?
Sometimes. Some unique homes are harder to insure, depending on construction type and location. Get insurance quotes before you apply, since every lender requires coverage.
Does a unique home take longer to close?
Often, yes. A unique home can take longer to close because appraisers need more time to research comparable sales, and automated valuations rarely work, so expect a full appraisal.
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Sources
Official sources behind this guide.
- What is the difference between a home equity loan and a HELOC? · Consumer Financial Protection Bureau
- What you should know about home equity lines of credit (booklet, PDF) · Consumer Financial Protection Bureau