The popularity of pole barn or post-frame construction is on the rise. This method is often used for stables and workshops thanks to it’s straightforward, perfectly engineered, and affordable build. More and more people are looking to use pole barn construction for home builds as well. Often these projects have considerable costs so it’s not surprising that figuring out how to pay for it and looking into pole barn financing is one of the first steps.
If you are thinking about building a pole barn home, it’s important to understand that there are certain specifications that banks and lenders have for defining home financing. That’s where pole barn financing specifically for a pole barn home presents a hurdle.
While overall a pole barn build gives you tons of customization and you should ultimately save on costs, depending on where you live can make it a bit tricky to obtain financing. Plus, you need to make sure your county allows pole barn structures to be built as homes.
Knowing who to talk to and the right questions to ask can make the entire process easier.
So You Want A Pole Barn Home? What First?
We know that the exciting part of building a new home is planning and imagining your dream house. However, before you get too excited and travel too far down the planning road, make sure you can actually build a pole barn home in your area.
Because the traditional method for building pole barns was simply sticking a pole in the ground, some zoning definitions and communities still define it that way. They aren’t up to speed with the incredibly efficient technology that’s been developed.
So the first thing to do: Make sure to check with your county to verify what the requirements are for building new homes in your community.
Luckily, here in Virginia post-frame homes are becoming more and more common. So, you should be good to go if building in Northern Virginia. Even still, double-check with your county just to be absolutely sure.
Here are some links to permitting for Virginia counties we serve:
Do I Need to Finance My Pole Barn Home?
Building or construction projects, no matter the scale, are always a big decision and have a cost.
Often, these projects will depend on your budget and goals. Even if you are prepared, you likely will still need to work with a lender to finance the build.
Before that though, you need to get an idea of how much money you need for your building project. If you know that a pole barn home is definitely what you want, speak with a builder to get an idea of the cost.
Generally speaking, pole barns are less expensive. However, the size, customizations, and other features can drive the price up. So, while a pole barn kit can be as cheap as a few thousand dollars, a pole barn home can cost as much as a traditional house.
Talking with someone who knows how much it will cost to install custom-sized doors and windows or certain flooring options will help you get a better handle on the overall cost of your dream pole barn house. Speaking to construction experts who understand the process and have experience is a crucial step in the process. Be sure to speak about all aspects of the build from utilities to site work and from framing to finish. Calculating a cost that includes every aspect of the build is important both for you and your potential lender.
Your Lender And Financing A Pole Barn House
By now, you should know whether you can build a pole barn home in your area and have a clearer picture of the costs thanks to speaking with a builder. So now, on to the potential lenders.
Often, it’s best to speak with multiple potential lenders and shop for the best lender who is truly willing to work with you and your situation.
You see, when it comes to financing, there are certain specifications that banks and lenders have for home financing. That’s where pole barn financing specifically for a pole barn home presents a hurdle or at the very least some very specific knowledge.
Educate Yourself and Your Lender
Sometimes banks are reluctant to finance pole barns or post frame buildings used as homes. They simply aren’t familiar with post-frame construction and are less likely to finance something they don’t understand. Just because it is different, doesn’t mean it’s not possible.
The main difficulty is that a traditional build is more common than a pole barn house. So the regulations are much more clearly defined for a traditional home build. Plus the foundation definition and permitting is a bit different for pole barns than for a traditional home.
If your heart is set on building a pole barn home, simply understanding the process and communicating that clearly to a potential lender can help you more easily obtain a loan.
For example, a common misconception with pole barns is that they aren’t as stable as traditional homes. However, with the latest technology for setting foundational posts, your pole barn home will be just as solid and durable as a traditional home. Understanding these differences and being able to explain or illustrate that a lender will help you exponentially.
Questions to Answer First
Before going and speaking with your lender, make sure you’ve thoroughly researched and planned your construction project. Just as you want to know everything you can about the possibilities for your home, your lender will also want to know as much as they can (and more). We have some questions to help you prepare to answer any questions they might ask.
Here are some of the most common questions:
- Is this a pole barn kit or a constructed pole barn home project?
- What type of building is this exactly?
- Will it be a dedicated living space or will it also be a workshop or garage or barn?
- Do you have a floor plan or building plans?
- What will your roof pitch (roof slope) be?
- Which type of foundational posts will you use?
- What materials will you use for your home (walls, roof, etc)?
- How many doors and windows will be in your home?
- What is the longevity of a pole barn home?
- Why are you building a pole barn home instead of a traditionally built home?
- How much do you expect to invest in this project?
- How much do you have for a down payment?
While answers to these questions won’t guarantee that a lender will agree to finance you, it’s always better to be fully prepared. Don’t be discouraged if the first bank you visit doesn’t work out. We also advise speaking with your construction expert, as they often know local banks their clients have successfully worked with and who understand the process.
One Step Closer to Your New Pole Barn Home
We know that one of the least fun parts of a new building process is the paperwork and money talk. You are just ready to start designing your new home! So hopefully this helps you navigate one of the trickier parts of the entire process.
A few final takeaways to remember when it comes to financing a pole barn house:
- Talk to your county to verify permitting ability for a pole barn home.
- Speak with a builder to estimate building costs.
- Shop around for the best lender and arm yourself with information.
Remember, that building a home, no matter what kind, is an investment. Pole barn homes are less common so you might encounter a few obstacles along the way.
Higher down payment: Often banks will require a higher down payment (often 30% or higher) for post-frame construction or pole barn homes. Why? Since this type of home is less common, they can be difficult to sell so banks see a traditional home as a proven and more reliable investment.
Shorter loan term: In general, loan terms are shorter. So be prepared to have a 5-year term rather than a 10-year term.
Paperwork: Be sure to have as much as possible when it comes to the building and your finances. Blueprints, structural details, material specifications, and more will let the lender know you are serious and prepared. It will also prove to them that the structure is worth the investment. On the other side, make sure to demonstrate your credit rating and gather the necessary funds. Finally, have evidence of potential insurance options. You might be able to qualify for some additional savings.
Now you should have everything you need to set yourself up for success. Once you’ve found a bank or lender that is willing to work with you, you will be one step closer to building your dream home.
Check out our building projects for inspiration!