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Any “tricks” to getting financing for an “off the grid” home?

saucymonkey | Posted in General Questions on

So my wife and I just hit an unexpected road block in our attempt to purchase our dream house in Maine. We found and off the grid home on six acres in a good location to our respective workplaces but have been informed by our mortgage broker that despite being qualified to borrow far more than the asking price, we cannot take out a loan on the house because no bank will finance such a property! Were talking about a very well made house in a desirable location not some squatters encampment. I had no idea this would be an issue and its really opened my eyes as to why off the grid homes are such fringe movement in this country. Has anyone else hit this same road block and found a way around this problem?

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  1. user-946029 | | #1

    Have you talked to another mortgage broker?

    While he's on the other side of the country, one of the most informed people I've met on the topic of mortgages for green homes is Dave Porter. You might want to reach out to him via e-mail dp @ He might know somebody who knows somebody.

    Good luck, and don't give up.

  2. GBA Editor
    Martin Holladay | | #2

    Here's a relevant link, although not much information is provided:

  3. DrDanger | | #3

    You might want to look up Sandra Adomatis. She is an appraiser and likely the nations most high ranking and well experienced "green" appraiser. She teaches classes for appraisers all over the country. I met her at this years NAHB green convention in SLC. Very approachable and helpful

  4. saucymonkey | | #4

    Thanks, this is a FSBO and there are other off the grid homes in the area so maybe there is hope. Another option would be to put it on the grid since the line stops just a hundred yards or so from the house. The lenders also want a centralized heating system, the two wood stoves and Rinnai heater don't count. What would be the cheapest way to satisfy this requirement. Can you run baseboard heat off a hot water heater?

  5. dankolbert | | #5

    Cheapest way would be to run electric baseboard and never use it.

  6. 5C8rvfuWev | | #6

    Dan's suggestion is exactly the solution my bank accepted for a wood-heated house some 35 years ago. We ran wires and cheap electric resistance units, had the house inspected, moved in, took out the electric resistance units to store them, installed the baseboards and marked them so when we resold we could show a buyer how simple it would be to reinstall if he was dumb enough to want that option.

    If electric is only a hundred yards away, it might be easy to do something equally temporary ... and unnecessary.

    But someday that problem of perception has to disappear in the mind of mortgagers and typical buyers.

  7. user-946029 | | #7

    How can Chris make those kinds of modifications to a structure he doesn't own?

  8. user941025 | | #8

    That part's the trick.

  9. gusfhb | | #9

    It is done all the time

    1] signed purchase and sale
    2] quotes from contractors to do the required work
    3] appraisal of what the finished house will be worth
    4] go to the bank for a construction loan

    Banks vary, but my bank just held a certain amount and wrote checks to the contractors and held back until occupancy permit was granted.

    Use an actual local bank, they are usually easier to deal with. You can always shop for a better deal later.

  10. saucymonkey | | #10

    The sellers have been very accommodating so far so I think we could pull this off.

    Still I must admit I was thinking and researching about this topic last night and the more I learned the more outraged I became. It should not be impossible for people to get a loan for an off the grid house. I'm not saying private banks should have to take on loans they don't want, but there should be some avenue for credit worthy people, who want to do something positive for the environment, to buy homes with smaller carbon footprints. If we were unable to connect this house to the grid it would be impossible to buy for not just us, but for anyone who needed borrow money. Its outrageous that the only people who can get off the grid are people who can afford to buy with cash, especially at a time when oil companies are still receiving billions in government subsidies, and frackers and coal companies are literally destroying the world we inhabit
    I feel like there's a story here that's not getting any attention because I consider myself relatively well informed and this issue came as news to me. I did find Michael Chandlers related blog here and I found it mind boggling to realize that for appraisers, jacuzzis and home theaters add value to a house, but solar panels and super insulating don't. We really need to do something to raise awareness on this issue especially while we still have a president who at least pretended to be in favor of sustainable energy. I don't know exactly what to do but I know that I'm eager to be a part of the movement to find a better way to live.

  11. dankolbert | | #11

    Chris - we have a monthly building science discussion group in Portland once a month, and problems like yours come up frequently. We've made fitful attempts to talk to bankers and realtors but haven't succeeded yet. It is definitely an issue, along with the whole question of comps and appraisals. One size is supposed to fit all.

  12. user-980774 | | #12

    Unmet demand equals opportunity. There are green investors and green mutal funds that could put some money into "non conforming' mortgages. An existing national lender could manage the fund without selling to conforming only investors.

    I am fearful that the mortgage meltdown, in addition to already damaging the livelihoods of many in the green building field, will also take away the innovation and variety available in the market and we will have "one size fits all."

  13. LLB2 | | #13

    Did Chris ever find a mortgage? I am trying to build with only solar power and not having much luck. No comps in the area, the bank wants comps.

  14. saucymonkey | | #14

    Yes we did get a mortgage thru a local bank (Camden National) but it was not easy and its not a conventional home loan. They lent us the money with a portfolio loan, but the terms were 20% down + the $20,000 it would cost to put the house on the grid,(its about 3/4 of a mile from the last house with power). Comps were definitely an issue and I thought it was outrageous that the $15,000 solar/battery set up was worth $0 in the eyes of the appraiser. It was really eye opening to me how in this day in age when we should be assisting people into alternative energy homes, there are in fact nearly insurmountable obstacles put in place to keep people on this unsustainable path. Good luck with your project, I wish I could be of more assistance to you.

  15. jb921982 | | #15

    I was just made aware of this issue by the realtor today when we viewed a home. I wasn't aware that financing an off grid home was so tricky. We are in Maine as well so I will be checking Camden National to see what we are able to do. There are no lines to hook into unfortunately, so this may be a big problem.

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