DOME MAGAZINE: Fall 199, Vol. 12| No. 1
Welcome to the frustration club. Here we really find out how bias, ignorance, and prejudice find their way into the everyday business of dome home financing. This may sound a little strong, but after you have asked your friendly (?) banker for a loan to finance your dream home, I am sure that in many cases, but not all, you will find out what I mean: commonly called “The Hard Way.”
There are certain procedures that you will probably have to go through, and if you do them right, and are qualified, you will then be the owner of an energy efficient Super-Insulated dome home.
Real Estate Loans
First, it is necessary to define the different types of real estate loans that the banker normally provides. They may offer you an “end loan,” which means that after the dome is completed, they will provide a long term mortgage on the house.
Another type of mortgage is called an “equity mortgage,” which means that they will provide you a mortgage against the equity that you might have in your home. This equity is the difference between the amount you owe and the appraised value of the home. If there is no mortgage, some banks are offering loans up to 125% of the appraised value. Today banks and mortgage companies are actively vying for this business. It is definitely a buyers’ market.
The last type of real estate mortgage that the banks usually offer is the construction loan. This is where the fun usually begins. A note of warning: When you apply for long term financing, don’t forget to ask about the FHA or VA insured loans. This is a loan that the government GUARANTEES the end mortgage, but many banks will try to steer you away because “there is too much paper work,” or some other excuse.
If you are stalled by the banker with regard to the insured loan, tell them that you will call the appropriate government office and register a complaint and then do it. We have had customers who were denied FHA loans, but when they made their calls, the loan commitment was made.
The next mortgage he may or may not supply is the “construction loan.” Many times when a contractor is hired to build the dome, he will provide the interim financing, for a price. This brings about the procedures that are usually necessary for the owner/builder, owner/contractor to go through to get this financing.
Most dome companies today offer help in getting the financing for the owner/builder. First, you should have done all of the legwork necessary before you make your presentation to the bank. That includes selecting a plan, and hopefully having the building permit in hand. Though not necessary, sometimes it helps. The bank will like to see that you know what you are talking about, if you have some documents in hand. One is the cost analysis sheet that will reflect the actual bids that you have received for the various phases of your project—plumbing, heating, mill work, carpeting, etc. Most dome companies will provide you with a cost analysis sheet, that you can use as a guide to get your bids.
The operation of obtaining financing may be the most frustrating part of building your Super-Insulated dome. Sometimes folks have interim financing from relatives or friends that get them through the early stages of their construction. After the dome has been partially completed, it is sometimes possible to get a loan for completion. After that the long term loan is placed.
Credit Cards
As told about in a previous article in the Dome Magazine, one dome builder completely by-passed the banks, with their high cost construction loan fees. They did this by using credit cards to do the preliminary financing. The rate charged by the card companies was substantially less than the banks were asking. When they had their house well along, they got an easy equity loan and paid off the cards. Then when the house was completed, they got a standard long term loan. They saved thousands of dollars over the bank charges, and had no hassle about appraisals, etc.
Each case is different. We have had one of our dome builders who went to 20 different lending institutions before getting a loan. Financing is one of the hurdles that you will experience in building your own safe, energy efficient dome home.
Being creative and persistent are two characteristics that will most certainly get you where you want to go. Bucky Fuller thought that the dome would become the housing of choice fifty years after his invention. But this is a reality check. Resistance comes from the banking industry, the architectural field, and the builders of conventional housing.
These are the people that can look at death and destruction of storms like the Oklahoma City tornado, and the hurricanes that destroy houses all along our coastal states, and turn around and build the conventional box house that will fly the next time the wind blows. So hang in there.
Owning and living in a dome home is well worth the hassle. I have lived in mine since 1984, and the thought of ever living in a box house again gives me the chills. I am anxiously waiting for the dome to become the housing of choice.