What you must know about financing a dome!

Please keep in mind that in this section, we're not trying to discourage you from building or buying a dome home. These unique structures have many redeeming qualities despite their lack of normal acceptance in the housing market.

The Appraisal Hurdle - 99% of these transactions fall apart on the appraisal. The reason why this happens requires a deeper understanding of the appraisal process. When an appraisal is done on a conventional home (for our example we'll use a 3 bedroom cape cod) the appraiser goes out and looks for 2 or 3 recent sales of other cape cod homes in your area. They will make adjustments for room count and square footage to determine what the value of your home should be.

When you build or buy a dome home, it's very easy for the appraisal to kill the mortgage financing because the following two things will typically happen.

• There are no dome homes in your area in which to base a value for your home off of.
• There are dome homes in your area, but because they haven't been sold within the last 6-9 months, they are ineligible to be used as a comparable to the dome you are building or buying.

When you consider that most people who build a dome home never sell them, the second scenario happens more often than we would like it to. When there are no comparable properties to base the value of your home off of, it is impossible for lending institutions to provide you with the money you need because they don't know what the home is worth.

So I'm over the appraisal hurdle, I'm home free right?

Wrong. Because these homes are unusual and lenders typically don't like to bring "riskier investments" into their lending portfolios, they tend to have higher qualifying requirements.

The Credit Hurdle - Because dome homes make up an extremely small percentage of the overall types of homes in the housing market, the lending institutions that hold your mortgage want to be 100% sure that you're not going to default on your loan. Having good credit means that you are less likely to default on your financial obligations.

The Equity Hurdle - The more equity you have in the project, the better. Like credit, equity is a measure of risk for lending institutions. The higher the loan amount in relation to the appraised value, the higher the risk of the transaction. When dealing with an unusual type of home such as dome homes, lending institutions prefer to have a lower level of risk on these transactions.

How can I still build a strong energy efficient home?

If what was important to you about the dome home was it's strength and energy efficiency, you may also want to look at Insulated Concrete Forms (ICF) or Structured Insulated Panel (SIP) technologies. Not only are they both strong and energy efficient, but they are also much more easily financed. Both will give you many of the qualities that dome homes do, with the exception of the dome shape. Additionally, both are eligible for the Energy Efficient Mortgage.