Financing Possibilities for Purchasing a Tiny Home


There are many reasons people choose to buy a tiny house.  Being debt free with no mortgage probably tops the list for most people, however.  What people most often misinterpret is that just because a tiny home doesn’t cost as much as a traditional home, the price can be a little more than you might think.  Saying that I want to stress that although tiny houses may not be as cheap as you would hope, they can be paid off quickly instead of years and years of debt.  One of the big questions people have is how can I pay for it?  Will banks give me a loan for a tiny house? 

First, let’s talk about what to expect money-wise when buying your tiny home.  Having someone build your home for you instead of building it yourself (be sure to check out our “Find a Builder” section on our website can cost you approximately $40,000 to $100,000.  In comparison, the average cost of a traditional home in the United States is $200,000 according to Zillow.  Now we all know that most people don’t have $100,000 just laying around so we have to think about financing.  Luckily there are now many more options for financing a tiny home than there once was.

If your tiny home is on wheels and is road worthy, you could qualify for an RV loan from various banks and online resources which offer them.  

  • These type of loans generally require proof of income and a good credit score. 
  • Loans of $100,000 or even more are possible when you qualify for an RV loan.
  • Generally, RV loans are for 15 years.  Some loaning institutions will offer an RV loan for 20 years.
  • Some loaning institutions require a loan application fee.
  • You could qualify for rates as low as 3.24% APR if your credit score is high enough.
  • Rates and monthly payments for this type of loan tend to be fixed.

It is possible to secure a personal loan to buy your tiny house as well.  An advantage here is that you do not have to get your home approved before you qualify for the loan.

  • To get a personal loan you will need proof of income and a very high credit rating (generally a FICO score over 740) to get the best interest rates and terms.  Your debt-to-income ratio will also be looked at by the lender to make sure you can repay the loan.  Typically they want this ratio below 36%.
  • Some lenders require an origination fee from 1% to 8% of the loan.
  • Personal loans of up to $35,000 are possible when you qualify.  Some lending institutions will give you more than this amount.
  • Interest rates typically fall in the range of 5.99%-24.99% depending upon your credit score.
  • Personal loans are generally fixed for the life of your loan.

Hold on where not done yet…

You may also want to look into lenders who partner with specific tiny home builders.  Some lenders will loan you up to $100,000 to build your home with a typical rate between 3.34%-10.97%.  Of course, loan qualification depends upon your credit score and having their particular builder construct your tiny home.

Sure tiny homes are a little more expensive than most people think, but there are now more options than ever before to finance your home.  Take your time, decide on what you want in a tiny home, choose a builder from our massive catalog of featured builders, and start looking into your financing options.  They are out there, you just have to reach out!

Until next time…Live Tiny!

F.A.Q. - What is a Tiny Home?

There is no set definition as to what constitutes a tiny house. However, a residential structure under 500 square feet is generally considered a tiny home.

More F.A.Q.s

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If you are a Tiny Home Builder and would like to add your information to our website please contact us and we will be happy to assist you. Also, if you are an existing builder and want to edit or change any of the information currently displayed please or be a featured “Builder” or have any advertising questions contact us for more information.