A big change and a big problem

Since the fall of 2007, financing homes, especially Monolithic Dome homes, has become a big problem. The federal government, determined to keep the banks from failing, established new rules for home financing. Those rules helped the banks and some home owners, but they destroyed the progress being made by builders of energy-efficient, greener, homes.

The new rules prohibit appraising nonconventional home designs. Consequently banks and lenders cannot approve loans for the construction of homes that do not look like, are not constructed like, or do not perform like traditional, American homes. 

In essence that eliminates anything that looks different, such as log homes and geodesics. It also eliminates anything whose construction is technologically advanced, such as Monolithic Domes.

A personal experience

Just recently a banker wishing to refinance my home called me. He offered better terms, a better payment schedule and immediate approval. The call went something like this: “Did you check with your manager before calling me?” I asked.

“No, why should I?” he replied. 

“Because you can’t refinance my home,” I said. 

“Why not? You have it financed with us now!”

“Yes, it’s been financed with you for 10 years,” I said. “But my home is a Monolithic Dome home and you cannot refinance it.”

With that, he said he would call back. Ninety minutes later he called, apologized and acknowledged that they were not allowed to refinance Monolithic Dome homes, even though they had financed them in the first place. Reason: Monolithic Dome homes were too different. Yes, they sure are different: fire-safe, tornado-safe, earthquake-safe, energy-efficient!

The current situation

Financing institutions, such as Wells Fargo who financed the construction of several Monolithic Dome homes in the past, no longer can get the appraisals and finance them now. New federal guidelines will not allow loans on anything that is not absolutely traditional. But how will we ever get better housing if we can’t get the money to build them? 

Sad ironies

Monolithic Dome homes cut energy costs by a minimum of 50%. The government wants us to save energy, but will not allow loans for Monolithic Dome homes.

Most Monolithic Dome homes meet FEMA 361 standards for structures that provide near-absolute protection from tornadoes. The government wants us living in and using disaster-resistant structures, but ….

Property tax appraisers do not have a problem appraising any kind of construction for tax purposes – no matter how nontraditional it may be. Why can’t lending institutions do the same?

America now has more than 1000 Monolithic Dome homes, many built by builders we trained and support. They are just as affected by the new rules as we are.

We are still selling some dome homes. Some get financed as part of a package that underwrites other property, such as a farm. Others get built and paid for with retirement savings. 

Most Monolithic Dome purchasers can put up a 20% down payment. Why not use that as a guarantee of future house payments? Most people who have a 20% interest invested in their home will do everything they can to make their payments. 

A plan of action

I’m sure that legislators who helped with the writing or passage of the new financing rules did not mean to exclude – possibly kill – a vital part of America’s construction industry. But they did. 

How do we get that action reversed? How do we get the government to rewrite appraising and financing rules so that nontraditional designs are not automatically excluded?

We suggest contacting House and Senate members and pleading our case. 

The website for the House Subcommittee on Transportation, Housing and Urban Development, and Related Agencies has contact information, including phone, fax and email, for the majority and minority members of this committee: www.contactingthecongress.org/cgi-bin/newcommittee.cgi?site=ctc2011&lang=&commcode=happrop_trans

The Senate Committee on Banking, Housing, and Urban Affairs has contacts for both the majority and minority committee leaders: www.contactingthecongress.org/cgi-bin/newcommittee.cgi?site=ctc2011&lang=&commcode=sbanking

Contacts for all other members of this Senate Committee are on: www.contactingthecongress.org/cgi-bin/newcommittee.cgi?lang=&commcode=sbanking_housing&site=ctc2011&address=&city=&state=&zipcode=&plusfour==

Please feel free to use this sample letter:

Dear (Legislator):

Many of us are doing everything we can to conserve energy, protect human life and property from disasters, and make our beautiful planet the greenest green it can be. But while some changes are easy, some are virtually impossible.

Among the virtually impossibles is the ability of folks to secure a loan to build a nontraditional house that is energy-efficient, disaster-resistant and that does not deplete our natural resources.

Reason: Right now, banks and mortgage companies are legally prohibited from providing money for the construction of a home whose value cannot be appraised, based on similar homes already existing in a given area.

But green homes are the result of relatively young technology. So while they may have been around, constructed and lived in for the past 30 or 40 years, compared to conventional, stick-and-brick, energy-wasting, disaster-prone homes, they are few and far between. That makes getting the necessary appraisal near impossible.

Yet, property tax offices throughout the United States have no problem assessing the value of any home – regardless of how unusual or different it may be. Lenders should be able to use similar yardsticks in valuing a property.

For that to happen, we need to change the current appraising/lending rules banks and lending institutions must now follow. As an American concerned about the welfare of our country and our planet, I am asking you to initiate legislation that would make securing a loan for the construction of a technologically sophisticated but nontraditional home possible. Let’s work together and get greener!

The website www.monolithic.com has just one example of a nontraditional, technologically sophisticated home for whose construction Americans cannot get mortgages.

Sincerely, 
(Your name here)

Your comments and suggestions

They are most welcome – especially if you have an idea about how we can get this unfair legislation changed. And if you get a reply from a legislator, please let me know what it is. Email me at president@monolithic.com or call 972-483-7423. Everyone at Monolithic appreciates your help. Thank you!