How to Finance Your Cob House: Options to Fund Your New Home

A photograph of an orange cob house with a sweeping roof with large overhangs and a balcony outside the upper floor at the front. Across the top are the words "How to Finance Your Cob House: Options to Fund Your New Home," in the bottom left is a lightbulb with a dollar sign inside.

Image courtesy of Brightly.

Although cob houses are eco-friendly, many people shy away from having one due to financing uncertainties.

Since cob construction is considered an alternative building method, getting financing can be challenging, especially if you don’t know where to start. That’s why we’re here to enlighten you on how to finance your cob house.

The main difference between financing a cob house and a conventional house is that the latter is usually easier. This is because traditional houses are considered a safer investment; thus, lending institutions are more willing to finance them.

On the other hand, cob houses may require you to talk to a few non-standard construction mortgage lenders to develop a loan package that best suits your needs and budget.

In the rest of this article, I’ll discuss how to finance your cob house. By covering the different options to fund your new home, you can make an informed decision and move on with your dream project.

Let’s dive right in!

1. The Mortgage Option

Mortgage approval paperwork has an "approved" stamp, a house key lying on top, and a key fob with a house attached.
Mortgages are the widely-accepted standard for financing standard house builds. However, you might need to look more carefully to find the right lender to work with on your cob house project.

I started with this option because it’s the most obvious — most people finance their homes through mortgages. In fact, Americans owe $11.92 trillion in mortgages.

Most people prefer mortgages because they have lower interest rates than personal loans.

Moreover, mortgages are easily approved because they’re secured on the property, and you could lose your house if you fail to keep up with payments.

The question remains, “Can you get a mortgage on a cob house?”

Although you can get a mortgage on a cob house, it can be challenging if you don’t know how to go about it. As mentioned earlier, cob houses are considered an alternative building method. Therefore, some lenders may be hesitant to finance them for the following reasons:

  • Lack of standardization: Unlike conventional homes, cob houses lack a standard over which lenders can evaluate their values and risks.
  • Limited market appeal: Cob houses are less popular than traditional wood and brick houses. Therefore, it can be hard for mortgage lenders to find potential buyers if the borrower defaults.
  • Perceived durability concerns: Although cob homes are known for their durability, some lenders consider them less resilient and, therefore, more risky.
  • Building code compliance issues: Most local building codes require cob houses to meet specific guidelines. This can be a challenge for some lenders who are unfamiliar with the local building code requirements.

To increase your chances of getting a mortgage for your cob house, you should consider working with a financial advisor.

Alternatively, shop around for non-standard construction lenders specializing in alternative building methods.

2. The Do-It-Yourself Option

A man holding some cob mixture shows it to the camera. There are trees in the background.
Cob is a natural material that can be molded into almost any shape. Image courtesy of The Year of Mud.

This is the least expensive and best option if you don’t want to deal with lenders.

The only investment required for a DIY cob house is your time and labor, which saves you bundles of cash. Be warned, though, building with cob is very time-consuming, so you’ll need the stamina and drive to complete the project. Some people bring in friends and family to help.

As one of the sustainable construction methods, cob houses are ideal for DIY builders for the following reasons:

  • They’re made from readily available materials — sand, straw, clay, and water.
  • They’re easily customizable, allowing you to add personal touches.
  • They’re relatively simple to build; you don’t need specialized knowledge or tools.

But before you decide to go the DIY route for your cob house, check your local building codes and regulations. There may be some requirements you must meet to get a permit.

A good rule of thumb is to start with the Cob Code Appendix AU on cob construction.

3. The Personal Loan Option

Personal loans are always reserved for non-land-based purchases like automobiles, furniture, or renovations.

A good thing is that with a personal loan, you decide what to do with the loan proceeds. Another benefit is that you won’t need to put up your home as collateral.

The amount you can borrow depends on your debt ceiling, credit score, and income.

The downside is that personal loans usually come with higher interest rates than mortgages. Thus, it’s essential to do your research and ensure you can afford the repayment terms before signing on the dotted line.

4. Leverage Sustainability Grants

A rolled-up grant document and stacks of coins with a house and a car on top set out on a table. A fountain pen lies on the table in the foreground.
There are many grants available for all sorts of home improvement and sustainable building work. You just need to know where to look.

As the push for sustainability gains momentum to combat climate change, governments and non-governmental organizations offer grants for eco-friendly construction projects. Luckily, cob construction is one of these projects.

You can use funds from these grants to cover the cost of building materials, labor, and other costs of constructing a cob house.

You’ll need to search for these grants in your local community or contact potential funding sources for more information.

Some options include:

If you’re a U.S. citizen, you can leverage The Inflation Reduction Act Tax Credits for your cob home’s renewable energy systems, which can further assist with costs.

5. The Private Funding Option

Friends and family members can be a great source of financing for your cob house.

If you pitch your project right, you may even get enough funds to cover building materials, labor costs, and other expenses associated with constructing a cob house.

It’s essential to be clear with the repayment terms so that both parties understand the expectations.

For safety, drawing up a formal contract is advisable to ensure both parties are protected.

6. The Crowdfunding Option

A herd of pink piggy banks on a white table with a white background.
Crowd funding is a popular way for people to fund all sorts of ventures. Building a cob house could be one of them.

If you’ve got excellent social networking chops, you can use crowdfunding platforms like GoFundMe and Kickstarter to raise funds for your house.

To be successful, you’ll want to create a compelling pitch and explain how the money will be used.

You may also need to provide incentives for investors who contribute more than expected.

With a success rate of 22.4% and 38.92% of all projects fully funded, crowdfunding can be a viable way to fund your cob house.

Frequently Asked Questions

What Is the Life Span of a Cob House?

The lifespan of a cob house is thousands of years. Some cob houses have existed for more than 10,000 years. However, cob houses require protection from water to last longer.

Is Cob Building Cheaper?

Contrary to popular belief, cob building is not a cheaper endeavor. It’s a labor-intensive process that requires more funding.

Cob building can only be cheaper if you go the DIY route. 

How Do I Fund a New Build Home?

You can fund a newly built cob home through personal loans, savings, crowdfunding, or relying on family and friends for support.

How to Finance Your Cob House – The Bottom Line

While the thought of financing a cob home might seem daunting, there are plenty of options that can help make it easier.

A point worth noting is that there’s no one-size-fits-all answer to financing a cob house. Therefore, do your research, crunch the numbers, and choose the best option for your particular circumstances.

Now that you know how to finance your cob house, here’s some more information to help you build sustainably; we’ve put together an article all about the lowest carbon footprint building materials to use today.

Similar Posts

Leave a Reply

Your email address will not be published. Required fields are marked *