Dream House

Wednesday, August 4, 2010

I think it might actually happen...

About 18 months ago, we purchased a half-acre lot in an older, established subdivision, with grandiose plans to build our dream home. We put together a design, and set about trying to get estimates. It became apparent though, over the next few months, that our minds had bitten off more than our pocketbook could chew. So the whole idea was shelved for a while.

Then I sat down and trimmed down the design (a little anyway, it wouldn't be our Dream House if I had trimmed down a lot), simplified the footprint a bit (to bring the cost per square foot down a little), and started over getting estimates. This time, things were a looking a little tight, but it just might be feasible -- if we eliminated the overhead costs of a general contractor by managing the project ourselves, and chopped out some of the labor costs by doing much of the internal work ourselves. But how to find a bank that was willing to lend a construction loan to a "self-builder".

Even in this economy, post-banking crisis, advertisements and mailings for Mortgages are relatively frequent -- but only select banks deal with Construction Loans, because it creates greater risk (there's no collateral until the house is complete) and greater management overhead (they have to inspect your progress at various intervals). And most of those banks require a General Contractor/Builder -- some even have a short list of General Contractors, and will not work with any others. But in this present stingy-lending economy, the few banks that used to consider loaning to self-builders have ceased to take on that risk. But after months of searching, we finally found a willing lender.

We now have a commitment from Normandy Corporation to finance construction, and have secured our building permit. Now we are refreshing the bids on construction, and if we can actually Close on the construction loan soon, we just may be breaking ground within the next couple weeks. Of course, if I had a dime for every time I've told someone over the past year that we were only a "couple weeks away from breaking ground", I'd probably have the house paid off already.

If anyone is interested, here are the floor plans for our new "scaled-back" Dream Home.

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