Same problem here. I had to jump through hoops to get a loan, and I owned the land free and clear!!! A half dozen banks later I got a loan for less than I asked for at first. Now the credit breaus are banging me for all those credit checks.

Sometimes I wonder if they want to see ANY building much less green building.

Dmaceld, try finding a green lender in Idaho. These people should be able to point you in the right direction. http://www.bgreenidaho.com/2009/04/ Don't expect much; in the end there's only one kind of green that matters to lenders.

Mortgagors have two worries --- first that that the mortgagee won't be able to meet the monthly nut and they'll have to foreclose, and second that a distress sale won't cover the loan amount. Building green helps in the first instance, but hurts in the second. Distress sales are usually done with no recourse and minimal information, meaning that the buyer needs a low enough price to cover contingencies and rarely attaches premiums to anything. When foreclosures dominate resales, quality construction is simply SOL.

Flocculus, no reason to cut and run. The building materials subject to commodity pricing (i.e. not ICF or SIP) haven't been this cheap for 20 years. Double stud wall; passive solar high mass with CMU; superinsulated 2x6, you can still be green on a bargain budget. I am doing very well in auctions and on eBay, in some cases paying less for materials than I dd for my last new house, in 1982.

A question for Chris Johnson. I'm hoping to build in your general neck of the woods, the Russian River. A small cottage and There are some of similar sq footage that have sold in the range I need - over $300,000. I am totally new at this - the house is for me to live in, not a spec house. Would it make sense to talk with appraisers in the area, get an appraisal and submit that along with the loan application? Sorry if this is a dumb question.

Regina (an obvious newbie)

Hi Regina
There are no dumb questions to ask for help, as the banks and the government change their rules without asking the people.

It makes sence to get an appraisal, but use one from the bank, as they usually only accept their own appraisers.

Find a house in www.houseplans.com that will be close to your dream home. Than get an appraisal of how green you budget allows you and most of all, make a check list, otherwise everything you forgot will create an extra cost.

You get 99% help here and you should not forget to ask any question that you find no answer. Due to the experience of many homes build you have to keep in mind that it will start with 110$/sf with open end depending on quality and size. 
Hoowood

You can't expect sanity in an insane system.
For example, it's common knowledge that long term usury is impossible. Take $0.01, invest it at 5%, and over time, it grows bigger than the whole supply of money in existence. But few question that short term usury is also impossible to pay in a finite money token system. Eventually, the outstanding obligations far exceed the money in circulation, and the system crashes and resets.
Why aren't we questioning why a house requires 30 years to repay? Who benefits from inflated overpriced housing and so on? Why can't we build whatever house we want? Why do we have to ask permission, if we're "free Americans"?
Oh - right - we're all insane.
Sorry to have bothered you.

I had the same problem with the last two houses I built. One home-owners bank comp's came in substantially less than the house cost. As a result the home-owner had to come up with another $30,000 just to get the loan. Luckily for me , she had the extra money needed and actually hedged the market in the process. She took the money from stocks she owned just before they nosedived and saved thousands from being lost to the market. While at the same time investing in the future. I have heard of banks that offered Energy efficient mortgages, that would allow you to increase your loan amount for energy savings. I just haven't found any. Even with a detailed energy costs calculations and energy modeling they didn't care. This makes no sense, if people pay less for energy they have more money to give the banks, or are the banks tied in with the energy companies and see no value in efficiency. The kind of thing that continues to save year after year after year. Let's not forget inflation, as the cost of energy rises the savings will be more and more significant. By the time you finish paying off a 30Yr mortgage the savings could be more than the original house cost. I hate banks almost as much as I hate lawyers. Don't they realize that last years dramatic increase in energy costs are one of the reasons people don't have the money to pay for their homes. If your energy costs double in a short period, like last year when home heating oil jumped to $4.79/ gal you may not have to make tough choices, like. Do I buy food this week or medicine or put gas in the car to get to work or oil to heat my home or pay the mortgage. If your energy costs are less then you are not impacted to the same degree. example. here in MA the average 2,000 sq/ft home cost around $1,500 to heat anually. If you cut that in half you get $750 anually. So now if energy costs double how much more would each have to pay? $1,500 X 2 = $3,000 but $750 x 2 = $1,500. your increase is still big but still 1/2 that of a code built home. Do you see my point? Energy costs will continue to rise and the rewards of saving it will far outreach the initial cost of investment. Who do we need to convince of this? How can we get the banks to see this? You would think given their accounting background this would be a no-brainer. Either way, if you can't get the loan to build a new more efficient home, don't build it!! Buy one of the thousands and thousands of other homes out there for cheap money, get what you pay for and hope for a better day. Why? Knowing what you know, would you ever build any other way? I think I need to take my frustrations out on a Banker, any volunteers?

Tom Pittsley
www.eebt.org

Hoowood,

Thanks for the response. I've put together a list of regional banks in Sonoma, Marin and Napa counties and will start calling on Monday to find out if anyone is still in the residential construction loan business.  I've already forked out the money for the plans and should have a permit in a couple of months.  If they won't loan me the money, I'll just hang onto it for a while and sell the lot with the plans as a package if I have to. I don't want to, the intent was not to make money, but to build a home for myself.  But c'est la vie.

Regina

Everybody in here should read this to not get crazy later

With the current big discount on existing houses, I would think twice about building - hard to not spend more than it is worth.