Dear Liz: I seem to be in a “Catch-22″ situation. My mortgage refinancing was about to close when the lender backed out because I live in a geodesic dome home and there are no comparable sales for domes in my area. I’ve tried to find another lender but none will finance a dome because there are no similar homes to gauge the value. I feel that I am being discriminated against because my house has a rounded roof over part of it, instead of a flat or peaked roof. My broker suggested that I get a reverse mortgage since this does not require comps. However, I do not want to go down that road. Do you have any ideas of what I can do to refinance, now that I’ve lost the low rate I was locked into?
Answer: In the real estate boom, lenders stopped worrying so much about little niceties like accurate appraisals. With the credit crunch, lenders are suddenly obsessed with appraisals, which typically require comparable sales.
“The problem with this is that there is no way to come up with a realistic estimate of value for properties with unusual construction type because there are rarely comparable sales,” said Dick Lepre, a senior loan officer at RPM Mortgage. “This includes domes, log homes and straw bale construction.”
What you need to find, Lepre said, is a local bank that intends to hang on to the mortgage, rather than sell it to investors. These lenders tend to be more flexible, but there’s no guarantee you’ll be able to find one willing to refinance your loan.
Your situation should serve as a warning to anyone who’s considering buying an unusual home, Lepre said.
“Anyone purchasing a home with any of these construction types should understand that mortgages are and will always be difficult and [that] it is a lot harder to find buyers,” Lepre said. “It is harder to find buyers because there are a limited number of people who want to live in such homes and also because it is harder for those buyers to find financing.”
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