Due to their low cost and fast build time, shipping container homes are growing in popularity. But finding a lender to finance a container home can get a little complicated – after all, they’re not your typical real estate. Lenders are often unwilling to finance unconventional homes due to lack of foundations or the possibility that it doesn’t meet local or regional standards. If you can find a lender willing to work with you, they will usually require a 20% down payment and you’ll typically need to own the land – as well as meet local dwelling standards.
A shipping container home is a type of modular or prefabricated (prefab) home that is manufactured off-site in a factory environment.
The modular unit is comprised of shipping containers that have been refitted for use as a home. The unit is then transported to the property location, where it’s either assembled by tradespeople or by the property owner.
Shipping container homes can be customized to fit specific size and design requirements, and you can attach several containers together to make a larger home.
Most new shipping container homes can weather almost any storm because they’re made of steel — which means they’re more stable than some houses.
But used shipping containers can be riskier. If the container was exposed to chemical spills, the structural integrity can be weakened. Plus, containers built for shipping goods often use industrial paints and are sprayed with insecticides, which can be a health hazard.
Depending on the size, structure and design, a shipping container unit could range from just a few thousand dollars for an empty container that you plan to renovate yourself to hundreds of thousands for a large home fully outfitted and made out of several containers. Some homeowners report paying anywhere from as little as $20,000 to as high as $200,000 for a shipping container home.
Remember that you’ll also need to purchase a piece of land to put your shipping container home on. You may also incur extra costs clearing the land or flattening it, accessing and hooking up to local utilities, as well as delivery and/or assembly fees for your new home.
Compare several quotes before deciding on a shipping container provider to ensure that you’re getting the best deal – and a clean, undamaged and uncontaminated container.
How you finance your home depends on how you build it.
If you’re building a new shipping container home and you own the land, your best bet to get financing would be the following:
If you’re buying a container home that’s already fully built and is just being shipped to your land, you may be able to get a regular uninsured mortgage. This means you’ll need to put down at least 20%, as CMHC typically won’t insure a dwelling like this. You’ll also need to make sure the container home will sit on a solid foundation and will meet all local building/dwelling codes and standards.
Consider speaking to a mortgage broker to help you understand your borrowing options. Provide as much detail as possible about your plans and consider approaching specialist or online lenders that may have more lenient lending criteria.
It can be challenging to qualify for financing to construct a shipping container home due to the limited number of lenders who may be willing to finance such an unconventional and new style of home. Lenders tend to be conservative with this type of construction and most lenders won’t let you borrow funds for a property that isn’t permanently fixed to the site or doesn’t meet all building regulations.
While these types of loan applications are handled on a case-by-case basis, you may be able to qualify for financing if you communicate well with your lender, have substantial savings and a reliable income.
Challenges associated with financing a container home include:
Shipping container homes are skyrocketing in popularity, but lenders are a bit slow to catch up to the craze. Compare mortgage lenders to find a provider who can help you build your dream shipping container home. If you’re struggling to find a lender willing to lend to you, consider saving up a bigger down payment or reach out to a mortgage broker who may be able to connect you with the right lender.
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