How Do You Finance a Barndo?

Post Frame Homes or Barndos are extremely popular right now due to the limits on houses available on the market as well as the option of self-finishing a Barndo if you have the skills or connections with contractors. 

(See our recent post about cost efficiency of post frame homes)

One of the main problems that people have in their Barndo journey though, is getting financing secured. But never fear! We have worked with many clients that successfully obtained financing for their post frame home. 

Here are a few things that will help you as you seek financing for your new home:

1. The more details you have, the better.  
2. Don’t call it a “pole barn”
3. Ensure the bank that you are using a permanent foundation system
4. Have good credit and try to have a decent down payment
5. Use your local bank, credit union, or bank that specializes in post frame loans or USDA loan (You can also check out these lenders that specialize in pole barn and barndominium financing and have partnered with our clients in the past!)

The more details you have, the better:

Banks may be quick to shut down your dream if you walk in with a few pictures from the internet of Barndos you like and no solid plans.  Your best bet is to have well thought out building plans with floor plans, elevations…etc. Another thing banks will be looking for is an accurate list of all the trades (electric/plumbing/HVAC) estimated costs as well as what you have planned for the building shell, labor, concrete, septic, site prep…and the list goes on.   

It can be daunting when you look at the list they give you, but peck away at it and before you know it, you will have it completed.

If you are using Milmar to build your exterior shell, we have a team to help you obtain custom plans and layouts and prices on the shell, windows/doors, concrete and more to help you lock in that loan! 

Don’t call it a “pole barn”:

This one may seem silly, but we have worked with some banks that the term “pole barn” scares them because they imagine an old style pole barn, not built well, that is a temporary building. And who could blame them for not wanting to lend money on that?

Stick with the more correct term of Post Frame, and it will help them understand better that this is a permanent structure that will be built to code to last a lifetime and beyond.

Ensure the bank that you are using a permanent foundation system:

The main problem banks raise with funding a post frame home is assuming that the foundation is treated wood posts placed in direct contact with the soil. With modern foundation options like Perma-Columns and Post Protectors, no post frame home should ever be built without a separation of ground contact from the posts.     

If you use a full concrete system like Perma-Column or even a traditional poured footer with posts bracketed off of it with Dry-Set brackets, the bank can rest their mind at ease knowing that you have a full concrete foundation that is as good or better than traditional home foundations.

Have good credit and try to have a decent down payment:

This one may seem like an obvious thing, but too often, people don’t know what kind of a rate their credit score will get and how much the bank will need for a down payment. The higher the better of course, but figure these things out early so you can prepare to wait if some work is needed on those.

Use your local bank, credit union, bank that specializes in post frame loans or USDA loan:

Many times, your local bank will be more likely to work with you on a custom home construction loan since they know you already.  Credit unions, Agricultural banks (if you are building on Ag property) or USDA loans may also be an option.

There are some banks that specialize in offering loans specifically for post frame homes/barndominiums and pole barn construction.

Good luck on your barn home journey and if we can ever be of assistance, don’t hesitate to contact us at 260-440-3190 or at info@milmarpolebuildings.com. We have built many people's dream barn homes in Indiana, Michigan, Ohio, and Illinois and we would love to help you plan yours!