Financing Tiny Homes: Big Solutions for Small Spaces

The idea of homeownership is changing. For a growing number of people, it’s not about a large house in the suburbs—it’s about freedom, simplicity, and living with less. That’s where tiny homes come in. These compact, efficient living spaces offer a unique lifestyle—but financing them can be anything but simple. At First Union Home Finance, we’re here to help you navigate your options, even when your dream home is smaller than most.

Why Traditional Mortgages Might Not Fit

Traditional mortgage lenders usually require homes to be built on permanent foundations and meet minimum size requirements. Many tiny homes—especially those on wheels or classified as accessory dwelling units (ADUs)—don’t meet those standards. As a result, they often don’t qualify for conventional home loans.

Creative Financing Options for Tiny Homes

1. Personal Loans: These unsecured loans are a popular choice for tiny homes under $100,000. They tend to have higher interest rates and shorter terms than mortgages, but they also offer flexibility in how the funds are used.
2. RV Loans: If your tiny home is on wheels and meets specific criteria, it may qualify for an RV loan through a lender that offers recreational vehicle financing.
3. Chattel Loans: Used for movable personal property, chattel loans are another option for tiny homes that aren’t permanently attached to land.
4. Builder Financing: Some tiny home builders offer financing directly or work with lenders who specialize in alternative housing.
5. Construction and Land Loans: Planning to build a tiny home on a permanent foundation? A construction-to-permanent loan may be an option, especially if you also need to purchase the land.

Tips for Securing Financing

• Understand your local zoning laws: Not all communities allow tiny homes, especially those on wheels.
• Boost your credit: A stronger credit profile can help you qualify for better loan terms.
• Know your budget: Getting pre-approved for a loan—whether it’s personal, RV, or construction—can help you plan realistically.

Let’s Talk About Your Homeownership Goals

At First Union Home Finance, we understand that a nontraditional home calls for nontraditional financing solutions. Whether you’re ready to downsize or simply looking for a more intentional way to live, we can help you explore the best path forward. And if you thought a traditional home was out of reach, we can help you uncover mortgage options that fit your budget and make homeownership more attainable than you imagined.

Ready to start your tiny home journey? Contact us today to talk to one of our home loan experts.