This being 2008, obviously the real estate market has taken a huge loss around the world and things continue to look bleak. How this affects people wanting to build a straw bale home depends a lot on their local conditions.
The first and most obvious place of impact is in the mortgage industry. The industry has tightened the reigns on all of its loans and interest rates, although dropping due to governmental actions, may not be what you want once the points and other impacts are added to the loan. The biggest issue here for people wanting to build a straw bale house is the willingness of a bank to actually give straw bale construction loans right now. In the past, it has been difficult to find willing banks, smart enough to step into this growing niche market. Now, things are even harder. Most banks want to loan only on the things they KNOW are safe. Taking risks is not in most banks’ vocabulary right now.
So what to do? It is likely time to revert to the old ways of getting a loan for a straw bale house: Using the term “cellulose insulation.” Instead of telling banks you are building a straw bale house, tell them you are building a post and beam home with cellulose insulation. This takes away the red flag of “Straw? Are you serious?.” Unfortunately, finding a bank willing to loan on bale homes is simply going to be harder in this environment. Harder that is until banks start to see the wisdom in the construction.
One thing we are seeing around the world is rising energy costs. It is true that the cost of a barrel of oil is at a long term low right now, but overall energy costs are still climbing and will continue to do so as we move forward. A bale home is a strong answer to this situation due to the high insulation value and the use of natural, renewable materials. Banks will, hopefully, eventually start to see the wisdom in supporting such construction methods. Some banks will lead the way and others will follow. Finding those leaders may be the task of OUR time.
If you have a bank that you know of that has loaned on bale homes, please post the contact information here. I want to support these banks and drive business their way. Let’s help grow this industry together.
1. Bank of Oregon – Contact: Jeff Case – (541) 842-5602 – Email: Jeff.Case@BankofOregon.net
2. ****Your Bank Here!****
Another road block to financing a straw bale house can be finding comparable sales. There are ways to manage this hurdle as well that are simple and clear. For a full list of hurdles and how to overcome them, please review my blog post entitled “Financing and Straw Bale Construction” by searching at the top of www.strawbale.com.