Barndominiums have become an increasingly popular housing option for homeowners looking for a blend of modern living and rural charm. Whether you’re building a new barndo or purchasing an existing one, financing can be a key consideration. Fortunately, specialized loan options make it possible to secure funding with flexible terms that suit unique property characteristics.

Key Financing Features for Barndominiums

If you’re considering financing a barndominium, here are the essential requirements and terms to keep in mind:

1. Credit Score Requirements

To qualify for barndominium financing, a minimum credit score of 680 is required. A higher credit score can improve your chances of securing better interest rates and loan terms.

2. Loan-to-Value (LTV) and Combined Loan-to-Value (CLTV) Ratios

Lenders allow up to 80% LTV, meaning you can finance up to 80% of the property’s appraised value. If you have subordinate financing, the combined loan-to-value (CLTV) can go up to 95%.

3. Debt-to-Income (DTI) Ratio

Your DTI ratio should not exceed 43%, ensuring that your total monthly debts, including the new mortgage, remain within an affordable range compared to your income.

4. Loan Amounts

Barndominium loans can be structured for amounts up to $2 million, accommodating a wide range of property values and buyer needs.

5. Acreage Limits

Financing is available for properties ranging from 5 to 160+ acres, making it ideal for buyers looking for expansive rural land.

6. Multi-Dwelling Properties

A single parcel can have up to three dwellings, which provides opportunities for multi-generational living, rental income, or additional guest houses.

7. Non-Contiguous Parcels Allowed

Unlike traditional mortgage restrictions, financing is available for properties with multiple non-contiguous parcels, providing flexibility for unique land arrangements.

8. Outbuildings Included in Financing

Properties can include various outbuildings such as barns, stables, silos, and sheds, making this an excellent option for equestrian properties, farms, or homesteads.

9. Schedule F Income Accepted

For those utilizing their property for agricultural purposes, Schedule F farm income can be considered in the loan approval process.

10. Property Value Considerations

The home itself can represent as little as 30% of the total property value, making this financing option particularly attractive for those prioritizing land and functional buildings over traditional home structures.

Is a Barndominium Loan Right for You?

If you’re looking for a mortgage solution that accommodates large acreage, agricultural income, and unique property setups, a barndominium loan may be the perfect fit. Working with an experienced lender familiar with these financing options is key to navigating the process smoothly.

At North Star Mortgage Network, we specialize in unique property financing and are here to help you achieve your dream of owning a barndominium. Contact us today to explore your options and get started on the path to homeownership!