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9 Things to Know Before Building a Barndo

A newly-constructed barndominium.

A unique option in the world of home construction, barndominiums (commonly referred to as barndos) are an aesthetic and cost-effective build. Here are the top nine things you need to know when you are looking to build a barndo—courtesy of our Rural 1st experts.

1. Many other lenders finance barndos at a higher interest rate, or not at all.

Because barndominiums have both shop and living space, most lenders view them as nontraditional builds and require a nonconforming home loan. They may only finance the construction portion requiring you to refinance with another lender for your permanent mortgage once your build is complete.

With Rural 1st you have the security of a one-time close that converts your construction loan into a fixed-rate mortgage once your build is complete—without refinancing. We finance barndos with conventional loans so you don’t have to pay more for the home of your dreams.

2. Your land may have existing equity.

We acknowledge not only the acreage, but any outbuildings and other site improvements to help you qualify for the maximum loan amount.

3. Communication is key.

It’s essential to communicate with your lender. They are a partner in your construction process and can share insights to help things move smoothly. And make sure the lender you choose has barndo experience so they know exactly how to service your loan.

4. Zoning laws may impact your build.

Different regions have varying regulations for building standards and specifications. Check with local officials to determine if the area where you’re planning construction allows the type of layout you want. We can connect you with the right people to obtain a permit to build.

5. Keep additional costs in mind.

Construction projects of any scale can come with unforeseen challenges and unexpected expenses. Your Rural 1st lender can help you estimate how much the full project will cost and how much cash reserves you’ll need to have.

6. Barndos are customizable.

Unlike traditional home builds, barndo layouts are extremely customizable. Generally, you have a blank box to design around your family’s needs. Is a remote work space important? Are you planning on growing your family? Maybe you need future storage for ATVs. Create your checklist and share it with your contractor.

7. You have two primary build options.

When it comes to building a barndo, you generally have two choices—you can either purchase a kit from a manufacturer or you can design a custom build from scratch. Rural 1st can finance either option as well as help you find a kit provider and contractor.

8. Save money and energy by building smart.

Whether using a kit or planning a custom build, include energy-efficient features. Factors such as insulation and window type can impact how effectively you can heat and cool your home, and how much it will cost. Talk to your builder about ways to incorporate energy efficiency into your barndo.

9. Rural 1st makes financing easier.

With simple loan packages and conventional financing, our expert team can save you time and headaches on your barndo build. And you can manage your project from start to finish with our easy-to-use digital tool.

If you’re ready to take the next step in building your barndo, Rural 1st is here to help. Get started today.

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