Construction Financing

One rapidly growing trend in the residential homebuilding market is for the homeowner to act as general contractor during construction. By handling scheduling, bids, subcontractors, and the inevitable jobsite challenges themselves, they save tens of thousands of dollars in construction costs. 

One mother of four in Tennessee estimates she will save her family almost $40,000 on their $265,000 home by being her own contractor for two hours a day. She’s working with the Owner/Builder Network, which provides training, financing, and basic construction management education for do-it-yourselfers.

A conventional general contractor, according to NAHB, typically averages about 21% gross profit margin, opposed to the 3% to 8% the construction guidance companies charge. Advantages for the consumer are clear.

Several ICF companies are taking steps to capitalize on this trend. Fox Blocks, Reward Walls, and Arxx all offer programs aimed at helping ICF owner/builders get the training, financing, and equipment they need to ensure their project is successful.

While it is more lucrative to train construction professionals planning to build multiple houses, in some areas, no trained contractor is available, and in most areas of the country, ICF homeowners are the primary drivers of industry growth. Additionally, it’s easier to train homeowners to build with ICFs than it is to build using traditional stick-frame methods.

Fox Blocks Partnership

Fox Blocks has created a partnership with Owner Builder Alliance aimed specifically at servicing the do-it-yourselfer interested in building their own ICF home and serving as their own general contractor.

 “If you would like to build your own ICF home, just like you want it, where you want it, you’ve come to the right place,” the partnership website announces. The partnership will provide everything from ICF home plans or design services, to financing, factory direct pricing on materials, and step-by-step construction guidance.

Financing includes a zero-down, 3-in-1 loan for lot purchase, construction costs and permanent mortgage. Construction guidance covers the entire residential homebuilding management process, including timelines, scheduling, inspections, bid forms, agreements, and so forth. They’ll even provide a tried-and-true subcontractor list and an independent building inspection of each construction stage before the code inspector arrives. 

More information about this partnership is available online at www.ownerbuilderalliance.com/icf/index.htm, or through Fox Blocks website and toll-free number www.FoxBlocks.com or 1-877-369-2562.

Reward 3-in-1 Financing

Reward Wall Systems has been helping owner/builders since
2003 with the 3-in-1 financing program it offers in conjunction with MidCountry Mortgage Corporation.

 “We’re very pleased with the results of the program so far,” said Chief Operating Officer Hank Pfeiffer. “The volume of loans that have been closed has matched our expectations. We feel the program is working as it was intended.”

According to Reward, the goal was to provide a way for ICF owner/builders to create the equity they need to build a new home by acting as their own general contractor. 

Steve Nelson, mortgage loan officer with MidCountry Mortgage Corporation, explains the program this way. “When homebuyers want to act as their own general contractors, they have trouble finding financing for their projects because they have no credit history as homebuilders. That’s where we come in.” 

Homebuyers often don’t have enough money for a down payment either, and the Reward financing package takes that into consideration. “With the 3-in-1 financing program, we use the equity created by the homeowners acting as their own contractors as a down payment,” explains Nelson.

First-time owner/builders may worry about the paperwork involved, but those who have gone through the process say it isn’t too bad. “This program worked as smooth as silk. We recently closed and are moving in now. The people at the bank were very nice to deal with, and the whole program couldn’t have been better,” said Steve Malm of Hastings, Minnesota.

Arxx Home Financing

Arxx Walls and Foundations offers a program that differs considerably from the first two. Their “Personalized Home Financing” program provides competitive, low-interest loans for all sorts of projects.

Currently, financing is only available in Canada, and the maximum loan amount is $40,000. 

The program has some enormous advantages. For starters, the loan is unsecured, meaning it doesn’t require collateral. The loans are backed by a well-respected Canadian bank that charges competitive interest rates and payments can be deferred up to 12 months.

Loans can be used to finance renovations or non-ICF improvements like a dream kitchen, home theater or whirlpool tub. If the job includes at least one completed Arxx wall, the project is eligible for financing. 

Sherri Bebee, marketing director at Arxx, says the program has received significant interest since it was launched this spring. Contact your local Arxx distributor for more details, or call 800-293-3210 ext. 216.