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Well, I’m sunk.

          Well, I’m really sunk now. See you all in bankruptcy court. As it turns out, Fannie Mae won’t make mortgages on underground homes. Not even earth berm homes. Who knew? Of course I should have guessed, since an energy-efficient home saves the owner money, affording the borrower more money to pay the lender, so who would want to condone that? And who wants to reward the American public for building energy-efficient buildings by guaranteeing their loans through a federally-backed mortgage guarantee program? Not Uncle Sam. And what sort of bank or credit union thinks about the risks they take when making loans – beyond the risks described by Fannie Mae? None.

          Just  never let them  hear the words “earth berm” or “underground” in association with your loan. I learned that the hard way. When the appraiser called to make an appointment to see my new home, she asked if it was a log home. Without thinking a thing about it – why should I? – I said “no, its and underground home.” Sort of proud of the fact that I birthed this green, tree-hugging little advancement toward re-cooling the planet. I wanted her to know that I’m this forward-thinking and sensible. She laughed. Actually, I thought she laughed, but now that I know what was going on in her little Fannie Mae head, I know she didn’t laugh; she snorted. Because she knew she wouldn’t be keeping her appointment to see my new, tree-huggery little un-mortgagable underground house. 

          If you live far enough away from a lender, you might be able to squeak by by emailing  them strategic pictures that depict the house they’re mortgaging as if they were energy hogs, which every one wants to buy (according to Fannie Mae), but eventually they’ll send out an appraiser, and then, as I’ve found, you’re sunk – at least if you describe your property accurately. Which is what I found out when my loan lady, Lani sprung on me the astonishing news that it wasn’t my credit-worthiness that scuttled my loan, but my choice of building materials. Suffice to say that I was shocked, shocked! to learn that they won’t finance an underground home. Everyone I mention this to is equally shocked, so at least I’m not just oblivious to that which everyone else already knew – my usually s.o.p. I do know that the next lender I contacted asked me if it was stick frame construction, and I replied – honestly – that it is a mixture of stick-frame, post-and-beam, and concrete. No lie. Now I’ll just have to go through a million of this new lender’s hoops to finally get to the stage when the appraiser appears, and then we’ll see if anyone has a technical definition of “earth berm” to hand. I’m always surprised at what people will believe when you tell them straight out that the thing they are looking at isn’t that thing at all: “no, madam, that is not a war. It’s a police action. And, while we’re at it, that tax break is not welfare for the rich, it is trickle down economics.

          This is not an underground home. It is situated on a hill, and some soil trickled down on it. Really. But why wrestle with the issue? In the end, I can just let my credit union re-possess my old house, can’t I? What if I file a homestead exemption on this house, and just stop paying on the home equity loan I took out on the old house? Let the credit union worry about selling it. Sure, I’ll be in credit-bardo for seven years, or whatever sort of consequence accompanies defaulting on a loan, but aside from that, I’ll be in the exact same financial position I was in before I took out the loan: I own my house free and clear. I own my pick up. I have no debt. The only difference will be that I can’t take out more loans. Who needs loans when you own your house and your car? I live a simple life, which is why I have a credit score of over 800, and I don’t imagine I’ll need credit for the next seven years, or if I do, I’ll work it out.

          All I’ve done in the past year or so, since I took on this project, is work crap out. If  the concrete truck couldn’t deliver on the day I’d scheduled a crew to pour concrete, I worked it out. If the utility room drains were put six inches to the right of where they were supposed to be, I worked it out. I moved the wall. If the wall wound up being one half inch narrower in the back than in the front, so that the cabinets didn’t fit, I worked it out. I can work this out. Don’t you think?

          One step toward working it out, if not for me, then for anyone else silly enough to attempt innovation in tree-huggery, is suggest some legislation to my friend, the Senator. See my letter to him in the post called “Dear Senator Tropilla”.

          Peace, love and tie-dye.


12 responses to “Well, I’m sunk.

  1. Calipso

    Hello, not so far time ago I tried to get bank credit to build house with sunlight batteries on, but bank manager loocked on me like on crazy :((.
    Have a nice New Year!

  2. I am affiliated with at least two lenders who have no problems whatsoever with an earth berm home, of course credit may be an issue, one of them lends in all 50 states, one company only lends in ohio kentucky and Indiana

    • Warren White ⋅

      Could you let me know if earth berm homes are eligible for reverse mortgages?

    • Laurie Johnston ⋅

      Hi Matt Martin, I’m looking for a lender for my earth berm house. Great credit, appraisal done — just need a lender. please contact me at

    • ken ⋅

      I would like to know a lenders who can do this for a earth berm home in Alabama I want to buy, credit has been approved but can’t get a loan for the house, FHA says it has to have windows in the bedrooms which are covered by earth ….

    • Jeffrey Morgan (M-Wood Corporation) ⋅

      Matt, would you mind sharing who these lenders are? We are interested in purchasing a home like this in Indiana and are having trouble with financing!

  3. Dan ⋅

    The next time your in town (GF’s) you should skip the Tropila avenue and go to Senator Baucus office accross from the post office on 3rd street north. And update his staff as to the Fanny Mae crap. In the past the Senator has been very helpful to me when dealing with a national insurance company for my father. It is amazing what Max can get done for the little folks in a short time. I think it would be well worth your time to try this avenue.
    Good luck,

  4. One problem with your blog; Fannie Mae will buy mortgages of Berm Homes. In their guide they have the following, “Mortgages secured by nontraditional types of housing—such as earth houses, geodesic domes, log houses, etc.—are eligible for delivery to us, provided the appraiser has adequate information to develop a reliable opinion of market value.” Likely your appraiser was just avoiding a difficult assignment.

  5. LMK ⋅

    We just had our lender refuse to REFINANCE our berm house at a lower interest rate. We bitched that they already held the mortgage and it was being paid off faster than required, and they said OH YEAH and relented. Not sure the issue, but make waves.

  6. Joe Morgan ⋅

    After having my dream home built to spec, now I’ve run into this issue also….

  7. Kay Jones ⋅

    Hi! Did anyone find a lender that would lend on a Berm home? I have one in California, and need a lender.. WE have the appraisal, and she did a great job, now the lender is having problems!! UGH

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