The good news is that mortgage funding of all kinds is slowly becoming more available, and there are still lenders who do log home construction financing. That doesn’t mean it’s going to be easy. It means be prepared to meet the challenges.

 

you clean up your credit. FICO.com will have specific tips on how you can do that.

3. Have enough for your down payment. Lenders will want at least 20% of either the appraised completed value or of the total construction and land purchase costs in your budget.

Lenders are still willing to include the current value of your land (as per an appraisal, unless you purchased it within the last six months) as part of your 20% equity.

If you put less than 20% of your own cash into the project, you’ll have to pay Private Mortgage Insurance, which has skyrocketed with the credit crunch. Siskoff says that he can still do 5% down deals, but the PMI cost increases the monthly payment by 30%! “And that’s only in parts of the country the PMI people have agreed to insure. They’ve redlined many parts of the country as having declining value and won’t issue insurance there,” he says.

4. Get an appraisal that will cover your costs. A sufficient appraisal has always been a challenge for log homes, mainly

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