The log-home industry is basking in the same interest-rate glow that warms the rest of the nation's housing industry, but buyers of kits who want to do the work themselves still find it more difficult to finance their dream houses.
"Be prepared to be frustrated," said John Cobbey, sales manager of Sierra Log Homes in Carson City, Nev., at a seminar on log houses held at the Holiday Inn in Torrance.
Prospective owner/builders will "have difficulty getting loan comparables" and will "face more difficulty than contractors" to get construction loans. Even so, Cobbey says that this hurdle can be surmounted with persistence--"you just have to go to more lenders."
The seminar was sponsored by Log Homes magazine, published by Home Buyer Publications of Falls Church, Va. More than 300 people paid $35 each ($50 for couples) to hear a panel of speakers from seven log-home manufacturers cover topics ranging from "Creating the Perfect Home Plan," "Cost Estimating" and "Financing" to the "Pre-construction Process," "The Construction Process" and "25 Questions to Ask Before You Buy."
The seminar was a success, according to moderator John Kupferer, publisher of Log Homes magazine and one of the founders of the Log Homes Council, an industry trade association. "We were prepared for 300 people, and must have brought in 75 extra chairs. When you can find 375 people in Los Angeles interested in building a log home, that says something," he said.
Kupferer says that both the Veterans Administration and Federal Housing Administration will and do finance log homes: "Most of the time lenders refuse the loan, not because it is a log home, but because the people aren't qualified--either they don't have equity or they (owner/builders) don't have any building experience."
He said that one problem with log homes that cropped up recently "is that Fannie Mae, in order to take a loan on the secondary market, wants an appraisal of a comparable sale within five miles of the log home. It's realistic for a conventional house, but not for a log home; there are thousands of log homes out there but it is not always possible to find a comparable with a sale within the last six months and five miles."
Kupferer said that obtaining building permits is not a problem: "All building codes have performance standards that allow for innovative technique--if you didn't do that, you would stifle innovation in design and construction."
Normal Time for Permits
Marvin Metcalf of Custom Log Homes in Malibu is building a house in the Decker Canyon area. Metcalf, a recent arrival in Southern California, says that financing is a little harder to get here because local bankers have not made loans for log houses. His solution has been to get letters about log home lending practices from bank managers at other branches in the state who have handled these type of loans.
Metcalf said that "it took about five months to get permits" from the Malibu office of the county Building and Safety Department to build in Decker Canyon, "about the normal time for a custom-built home."
He estimated that his "turnkey price to build a log home" is about $50 a square foot for "quality construction with oak flooring, high-grade carpeting and finishing" compared to about $70 a square foot for a conventional design of the same quality.
'More Paper Work'
Sierra Log Homes' Cobbey said that "We put a lot of homes in Los Angeles County--30 or so including Saugus-Newhall, Castaic and one right near downtown Los Angeles. We've never been denied permits, but there is more paper work involved in Los Angeles than, say, in Modoc County."
Cobbey said that an owner/builder can build a log house for about $30 to $35 a square foot, not including land costs. He said log-home-kit houses are a "means for people who cannot normally afford the price of new homes, to get into one; it represents a substantial savings for the owner/builder. It's not for everybody, but log homes lend themselves to the owner/builder better than frame houses--they are simpler to put together."
Kupferer predicts that 28,000 to 30,000 log homes will be built in 1987, up from 10,000 in 1970.