A sukkah or succah is defined by Wikipedia as a “temporary hut constructed for use during the week-long Jewish festival of Sukkot.” The quality and design of these Sukkot continue to get more impressive with each passing year. I once heard a story that people within a gated community were debating about the permissibility of building a sukkah in the development. The board was unyielding against any kind of construction, extensions, sheds and the like – without the proper permits. Nevertheless, they decided to build their Sukkahs anyway. Predictably, they were immediately slapped with a ‘notice of violation’ that mandated for the “sheds” to be removed in 30 days, or they would be faced with a $1,000 fine. Needless to say, the temporary huts were removed well before the 30 day expiration. The theme got me thinking about other non-permanent or unique occupancy situations that might have challenges getting a mortgage.

Summer/Vacation Homes

One of the more common situations that might fall under the category of a “non-permanent residence” would be second homes or a vacation homes. I often get inquiries about people looking to finance bungalows in upstate New York that people often use during the summer months. Depending on the construction and quality of the dwelling the answer is usually favorable. The home needs to have permanent heat, and must be suitable for year-round occupancy. In addition, to be eligible for conventional financing and classified as a second home, the property is restricted to one-unit dwellings that must be occupied by the borrower for some portion of the year. Furthermore, the homeowner must have exclusive control over the property, and it may not be a rental property or a timeshare arrangement.

Modular or Prefabricated Homes

Another common question and inquiry is regarding modular or prefabricated homes. Again, a competent direct lender will have almost no issue getting a mortgage for modular homes built in accordance with the Uniform Building Code administered by state agencies responsible for adopting and administering building code requirements for the state in which the modular home is installed. Prefabricated, Panelized, and Sectional Homes are also eligible for conventional financing as long as they conform to local building codes in the area in which it will be located. However, homes secured by certain “on-frame modular construction” are not acceptable for traditional financing.

Properties with Outbuildings

Properties with outbuildings are often acceptable for traditional financing provided that the property is truly residential in nature. Minimal outbuildings, such as small barns or stables, that are of relatively insignificant value in relation to the total appraised value of the subject property are acceptable without issue. Significant outbuildings, such as silos, large barns, storage areas, or facilities for farm-type animals might be more problematic as these buildings may indicate that the property is agricultural in nature. The lender will need to rely on comments and comparisons from the appraiser to make an accurate determination.

Temporary Certificate of Occupancy

With Newly Constructed homes or major renovations, the question of getting a mortgage without a full “Certificate of Occupancy” or with a “Temporary” Certificate of Occupancy is very common. Each township will have their own mandates and requirements for each, but it is certainly possible for “direct lenders,” such as Approved Funding, to work with the local appraisers and townships to get financing in place even before a CoO issued or with a TCO.

It is evident that unique properties required unique guidance, and only with the proper consultations with a competent mortgage lender will you be able to successfully navigate through your specific circumstances. The more creative and sensible the lender, the easier it will be to work to find a solution to meet your unique requirements. A special shout out to Dr. Yosi Fishkin.

By Shmuel Shayowitz

 Shmuel Shayowitz (NMLS#19871) is President and Chief Lending Officer at Approved Funding, a privately held local mortgage banker and direct lender. Approved Funding is a mortgage company offering competitive interest rates as well specialty niche programs on all types of Residential and Commercial properties. Shmuel has over 20 years of industry experience including licenses and certifications as certified mortgage underwriter, residential review appraiser, licensed real estate agent, and direct FHA specialized underwriter. He can be reached via email at [email protected]