Most buyers are unable to pay cash for a new home and will need to finance at least part of their purchase.

To build a Logical Home you will likely need a construction loan or a "hard money" loan. Construction loans differ from traditional mortgages in that they are a form of short-term financing involving progress payments to contractors as the project moves forward. Some construction loans are configured to automatically convert into a traditional mortgage once your home is complete. (These are often called "construction-to-permanent" loans and you can read more about them here.)

Construction loans are available from most major lenders, and from the borrower's perspective they involve similar application processes to a regular mortgage plus some additional information related to the construction project.

All Logical Homes are built to standard IBC/UBC/NBC Building codes. This is an important point because, while we do use unique materials and processes, we want to make sure that our homes adhere to the codes that most lenders are comfortable with. Therefore from an appraiser's and lender's perspective your Logical Home adheres to the same building codes as the "typical" home or a heavy gauge steel/light gauge metal framed home for which financing is available. Our homes are not HUD code (commonly known as "trailer") homes or some other form of unique code - they adhere to the same IBC/UBC/NBC code as a regular "stick-built" homes.

The funds from a construction loan are used in several ways. Here is one way of understanding the components:

1. Construction soft costs. These consist of architectural plans, engineering, and permit fees.

2. Construction hard costs. These are all the physical costs of fabrication, construction and installation.

3. Closing costs; consisting of lender and origination fees. These also include the title and closing fees.

4. Inspection fees.

5. Reserves; consisting of interest reserve and contingency reserve.

6. Existing lot (land) pay off.

Here is some further information regarding construction loans. We do not endorse any particular lender and this information is provided for your convenience with the understanding that you will undertake your own research.