NON-STANDARD CONSTRUCTION MORTGAGES

A mortgage designed to finance unconventional or unique properties is known as a non-standard construction mortgage. These properties may be made from alternative materials, such as straw bales, or have unique designs, such as earthships. By providing an alternative to traditional mortgages, buyers can purchase or construct homes that may not meet standard criteria.

Non-standard property mortgages generally require additional documentation to ensure the property's safety and structural soundness and come with different requirements, including higher down payments and interest rates. Despite these variations, these mortgages offer benefits such as flexible terms and conditions and may be ideal for individuals seeking a distinctive living experience and those wanting to construct one-of-a-kind properties.

Just a few examples of properties we have worked on mortgage deals for, which could be described as non-standard in construction are:

• Unconventional materials - adobe, cordwood, ferrocement, logs, shipping container homes, straw bale (thatched roof), timber frames or have
• Unusual designs, such as berm houses, cob homes, conversions (e.g., barns and churches), dome homes, earthbag homes, earthships, round homes, underground homes, and yurts among others, are considered non-standard in construction

Non-standard construction mortgages vary from standard mortgages in several ways. They are intended for properties that do not meet the criteria of a traditional mortgage, such as unconventional material or design choices.

These mortgages may require a higher down payment, more documentation, and have higher interest rates because they pose a greater risk to the lender. The terms and conditions of a non-standard construction mortgage may be more flexible than those of a traditional mortgage, enabling borrowers to tailor their financing to their specific requirements.

Obtaining a non-standard construction mortgage can be more challenging than securing a traditional mortgage due to the increased risk involved in financing a unique property. To offset this risk, lenders may require a higher down payment. Borrowers may also need to provide additional documentation, such as building plans, permits, proof of income and assets, and evidence of construction progress.

Some of the benefits include:

• Financing for unique properties - thinking outside the box with your property? These mortgages offer financing options as unique as your dream home
• Flexibility - these provide borrowers with greater flexibility in customising their loan terms and conditions compared to traditional mortgages
• Higher resale value – these mortgages can boost the resale value of unique properties due to their rarity, novelty, and distinctiveness.
• Increased sustainability – these properties are often designed with environmental friendliness and sustainability in mind, which can lead to reduced long-term costs and environmental impact.
• Lower competition - there is often much lower competition among buyers for unique properties
• Lower utility bills – these properties often include energy-efficient features, which can lead to lower utility bills and cost savings in the long run
• Opportunity to customise – these mortgages allow borrowers to personalise their homes according to their individual needs and preferences.
• Personal satisfaction - building or owning a unique property can be a source of personal satisfaction and pride
• Potential tax benefits - in some cases, non-standard construction homes may qualify for tax benefits related to energy efficiency or sustainable design

Non-standard construction mortgages are typically intended for unique properties that do not meet the requirements of traditional lending, rather than for renovation projects. However, some lenders may offer renovation loans that include non-standard construction elements, such as unconventional materials or designs. The lender's policies and the specific details of the renovation project will determine whether this type of financing is available.

Additional documentation and a higher down payment may be required to ensure that the renovation meets local building standards and regulations. To learn more about your options, contact us at ams: and we will work with lenders to find the best solution for your situation.

Typically, non-standard construction mortgages are intended for financing the purchase or construction of unique properties, rather than land alone. However, certain lenders may provide land loans that include non-standard construction components, such as funding the purchase of land for building an earthbag or thatched roof house.

Obtaining a non-standard construction mortgage may be more difficult if you have a low credit score as these mortgages are considered higher risk by lenders. Typically, borrowers may need a higher credit score than what is required for traditional mortgages. However, some lenders may still work with borrowers with lower credit scores, but they may require a larger down payment or other factors to mitigate the risk.

At ams: our team can liaise with lenders who specialise in non-standard construction mortgages to assess your circumstances and help identify the most suitable financing options for you. If we can’t help, then it’s not possible!