Best Tiny House Loans

Finance the purchase of your sustainable dwelling

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Young couple talking in doorway of their tiny house

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Tiny houses can be purchased by using a tiny house loan. These loans are vastly different from typical mortgage loans because a tiny house is not considered to be real estate. It's not always permanently affixed to the land it is on and you typically need to rent or purchase the land in a separate transaction.

You can find a tiny house loan through a bank that provides specialty loans or from an online lender often in the form of a personal loan. Tiny loans can be unsecured or secured. Keep reading to see which of these best tiny house loans is right for you.

Best Tiny House Loans of 2021

Best Overall: Liberty Bank

Liberty Bank of Utah

Liberty Bank of Utah

Why We Chose It: Liberty Bank offers nationwide financing for tiny houses with an in-house loan division dedicated to them.

What We Like
  • Published average rates

  • Answers to frequently asked tiny house questions

  • Multiple repayment terms

What We Don’t Like
  • Have to use the tiny house as collateral

  • Bank keeps the title until the loan is paid off

Founded in 1956, Liberty Bank is a locally owned community bank that serves the Salt Lake City metropolitan area. It was founded with the objective of providing personalized products and services to its local residents. In addition to standard banking services, Liberty Bank offers nationwide tiny house loans, home loans, second home loans, reverse mortgages, and more. Unlike most banks, it has a tiny house loan division and is knowledgeable about this budding industry. Liberty Bank is personally invested in the tiny house space and its loan officers have even visited locations where they are built.

The loan isn’t considered a mortgage and there is no lien, but the tiny house is used as collateral and the bank keeps the title until the loan is fully paid. Rates vary depending on borrower qualifications but typically range from 6 percent to 10 percent (as of February 2021). Terms are five, 10, 15, or 23 years in length and loan amounts go up to $100,000. A minimum credit score of 680 is needed, as is a minimum down payment of 20 percent. You can apply for a loan via the bank's online application portal or through a downloadable PDF.

Best for Quick Funding: LightStream

LightStream

LightStream

Why We Chose It: LightStream has the financial backing of industry giants but offers simple loan applications and quick funding times.

What We Like
  • Competitive interest rates

  • Fast funding times

  • No loan origination fees

What We Don’t Like
  • No tiny house loan division

  • Larger loan amounts tend to have higher rates

LightStream is an online consumer lending division that has the backing and financial support of industry giants BB&T and SunTrust (which in 2019 merged and became Truist). It was founded in 2014 and focuses on rewarding well-qualified borrowers with strong credit scores with an easy, streamlined, and transparent loan process and competitive rates. Although it doesn’t have a specific tiny house loan division, you can use one of its personal loans to finance the purchase of one.

LightStream offers multiple loans, including home improvement loans, auto loans, debt consolidation, boat loans, and loans to cover medical expenses. Qualifications, rates, and terms vary depending on the type and size of the loan and the borrower's qualifications, particularly their credit score; typically, a score of 680 or higher is needed to qualify for a loan and terms range from two to 12 years. Rates generally start around 5 percent (as of February 2021) and there are no loan origination fees or prepayment penalties. Loan amounts typically range from $5,000 to $100,000. Funding can be as quick as the same day as the application is approved.

Best for Bad Credit: Rock Solid Funding

Rock Solid Funding

Rock Solid Funding

Why We Chose It: Rock Solid Funding has a low minimum credit score for its tiny house loans and offers an online application and no maximum loan limit.

What We Like
  • You can qualify for a loan with a lower credit score

  • No maximum loan limit means you can customize your tiny house more

  • Flexible loan repayment terms

What We Don’t Like
  • House must be built on wheels to qualify

Rock Solid Funding was founded in 1997 as a way to help more dealers and customers finance purchases. This lender finances horse, utility, cargo, and livestock trailers, boats, recreational vehicles, and tiny houses on wheels. It offers loans for vehicles purchased from private sellers or straight from the manufacturer. The company is based in Colleyville, Texas, but finances loans across the country.

You can apply online, over the phone, or through a printable application that you return via fax, and most loans allow for a co-signer. Loans start at $1,500 and don’t have a maximum amount. The credit score minimum requirement is 575, which is much lower than most other tiny house lenders. Rates start at 4.5 percent and go up to 17.99 percent (as of February 2021), and terms range from three to 20 years with no prepayment penalties. Loan approvals can be done in as little as one hour. Because the loan amounts and terms are flexible, you can customize your tiny house, add upgrades, or focus on eco-friendly finishes.

Best for No Fees: Marcus by Goldman Sachs

Marcus by Goldman Sachs

Marcus by Goldman Sachs

Why We Chose It: Marcus by Goldman Sachs never charges any loan fees, prepayment penalties, or sign-up fees, and is backed by a financial industry powerhouse.

What We Like
  • Fixed interest rates

  • No lender fees

  • Fast loan approvals

What We Don’t Like
  • Low maximum loan amounts

  • No co-signers allowed

Goldman Sachs was founded in 1869 and is a global investment management firm that also offers banking services and securities. It’s one of the most well-known and well-respected financial firms in the world and its clients include notable individuals, governments, financial institutions, and corporations. Marcus, a division of Goldman Sachs, offers personal loans, home renovation loans, high-yield savings accounts, and debt consolidation loans.

Loan amounts are on the lower end and typically range from $3,500 to $40,000. This is ideal if you want to build your own tiny house or want to finance part of it and pay cash for the rest. The company prides itself on not charging fees and offers competitive rates that range from 6.99 percent to 19.99 percent (as of February 2021). There isn’t a reported minimum credit score or income requirement, but a strong credit score is generally needed to qualify for a competitive rate. Terms range from three to six years. You can fill out the loan application online and approvals take about 24 hours. Some incentives the company offers include an auto-pay discount of 0.25% and a reward for making payments on time.

Final Verdict

Each of these tiny house loan lenders has something different and unique to offer. We looked at personal loans with no collateral, bank loans with collateral, and companies that specialize in lending money for the purchase of a tiny house. The loans have various qualifications, rates, and terms, and all of them have different application and funding times. Overall, we were most impressed with Liberty Bank thanks to its dedicated tiny house lending division.

Frequently Asked Questions

What Is a Tiny House Loan?

A tiny house loan is a specialty type of loan used to finance the purchase of a new or existing tiny house. Some banks offer tiny house loans, as do specialty lenders and online lenders. It may be an unsecured loan requiring a strong credit score and good overall financial health or a secured loan that uses the tiny house as collateral. This means that if you default on the loan, the lender can take ownership of the tiny house.

Tiny house loans are different from traditional mortgages. Some tiny houses are portable and can be towed from place to place, so when you purchase a tiny house from a manufacturer, dealer, or private seller, you generally don’t buy the land as well. You would either rent or purchase land that you want to use in a separate transaction.

What Are the Types of Tiny House Loans?

Personal loans can be used to purchase tiny houses and so can some types of trailer and RV financing if the tiny house meets the requirements. There are typically two types of tiny house loans:

  • Personal unsecured loan: A loan based on your credit score, income, and financial strength that doesn’t need anything for collateral
  • Secured loan: A loan that also has credit score and income requirements and also uses the tiny house as collateral in case you default on the loan

What Is Considered a Tiny House?

A tiny house is typically a residential unit that has no more than 400 square feet of floor area, excluding lofts. It can be mobile like an RV, mobile house, or trailer, or it can be permanently affixed to the ground similar to a traditional house. Tiny houses are usually constructed of high-quality, sustainable materials that are made to last.

These structures can be customized to suit your needs and some people live in them year-round, temporarily, or rent them out for extra income. The tiny house industry pays special attention to the environment and builds the houses by creating as little waste as possible, and keeping the focus on sustainability and energy efficiency.

How We Chose the Best Tiny House Loans

There are many tiny house loans to choose from and we researched more than a dozen. We chose reputable companies with years of lending experience and positive overall ratings and reviews, and compared these tiny house loans based on loan types, borrower qualifications, application ease, funding time, and maximum loan amounts. We also took fees and rates into consideration, where available.