Figuring out how to pay for your tiny home or RV can be a daunting task if you’re not flush with cash. Securing tiny house financing can be extremely difficult since tiny houses are still a bit of a legal grey area. This book on everything you need to know before buying a tiny home would be a great first read or taking tiny house vet, Macy Miller’s Tiny House Comprehensive 101 Course. But if you’re going the RV/trailer route like I did, you’ll have a much easier time securing financing. The financing process for RV’s is more similar to a car than a home. But getting your finances in order is a major step you definitely don’t want to overlook as you begin the downsizing process.
Tiny House Financing Options
Cash – Obviously this is the most ideal situation. Many tiny housers choose to build/pay as they go or save up if they are unable to secure bank financing. But paying as you go is great if you have no deadline for moving in, but is hard when you’re on a time crunch. This is the best option for people who are nervous about taking on debt and obviously preferable to truly live a stress/debt-free lifestyle.
Your Personal Banker– Have you been a loyal customer of your bank for many years without any negative marks on your account? Schedule a time to go in and chat with your personal banker. Explain the situation and see what options they might have available to you. If you’ve spent time building a good relationship with your bank it could pay off huge in getting approved for financing with good terms.
Friends & Family – This is always a bit of a tricky situation. Only go the F&F route if you are 100% confident you can pay them back + interest in FULL and on time. I’d also suggest putting together an easy to understand term sheet, like this one, and having both parties sign it and agree to everything before money starts swapping hands. Treat it like you would any regular business transaction.
TinyHouseLending – A site that matches you with lending institutions that are willing to underwrite unsecured personal loans up to 100k.
Light Stream– A tiny house funding option with fixed rate loans for various amounts depending on your funding needs.
MeetEarnest – A new online funding institution that does both student loan re-financing and personal loans. Simple application process, uses LinkedIn and other unique data points to better understand you as a borrower.
TinyHouseLoans – Links to a free E-book about peer-to-peer lending for tiny homes. This is also a great opportunity for those looking to invest and support the tiny house movement.
BorrowersFirst – Another online funding institution that does a variety of unsecured personal loans.
Crowdfunding– Now this is just my opinion, but I am against people crowdfunding to build their personal tiny home. I think platforms like Kickstarter, Indiegogo and GoFundMe have specific purposes and getting money from people to build your home isn’t one of them. With that said, of course there are always exceptions and extreme cases like natural disasters that displace people who may ask for money to build shelter or new home. I do think though this can be a very cool idea in lieu of wedding gifts, a honeymoon fund or something similar. So with that said. . .
Start a HoneyMoon/ Birthday/ Holiday Gift Fund– Consider setting up a fund that family and friends can donate to on birthdays and holidays in lieu of gifts. Zola is a new wedding registry/fund site. You could use one of these sites to ‘register’ for items for you tiny home if you feel more comfortable doing that. It could be fun and a more personal way to allow your friends and family to help you build your tiny home without it feeling like a handout.
RV/Motorhome Loan – If you are purchasing your tiny home from an ‘RV-certified manufacturer’ like Tumbleweed Homes, many are beginning to offer financing with purchase of their plans. Also, there are many sites like the funding sites above that will approve loans if they are for the purchase of a boat, RV or motorcycle.
Need help planning the initial budget for your tiny home or RV purchase? Grab your free printable tiny house budget worksheet below!
Have a question about living tiny, specifically living in an RV? I’d love to answer it in the comments below!