Financing 101 for Metal Buildings. Is It Difficult in 2024?

financing metal building home a featured image with steel frame home in the background and dollar bills besides

Why is metal a popular choice of material for buildings? Steel and aluminum are known for their strength, durability, and versatility. This makes them able to withstand extreme weather conditions. In addition, they can be built relatively quickly and easily. Generally, they are less expensive than traditional brick or wood frame buildings. They also require less maintenance and are more resistant to fire, termite infestation, and rot. All of these things together mean metal building construction costs are cheaper in the short and long term.

This explains why metal is commonly used for a variety of buildings such as warehouses, shops, garages, barns, and, you’ve guessed it, trending metal frame homes like barndominiums, shipping container houses and shouses (shops + homes) In this article, we will go over the various ways of getting financing for a metal building.

Why Finance a Steel or Metal Building?

Steel building financing makes purchasing accessible for people who don’t have a ton of cash lying around. Borrowing money from a lender and paying it back over time helps ease the financial stress of buying a house. In essence, people choose to finance a metal building because it allows them to purchase the it without paying in full.

Financing a metal building house comes with responsibilities such as monthly mortgage payments. It is important to keep this in mind because there is a risk of foreclosure if payments are not made on time. Make sure you have done a fair bit of financial planning to choose a mortgage you can afford to pay on time. This is why it is critical to do your homework and review all the steel building financing options you have to find the best mortgage terms and interest rates. You may also consider financing other alternative buildings like barndominiums. Check out our article on barndominium financing for more info on barndos.

metal building home mortgage

How Do I Finance My Metal Building?

There are several ways to get financing for a metal building house. The best one for you depends on your financial situation. Below are several ways to finance your project.

Financing It Yourself

This is the best option for those who can afford it. Financing a metal building yourself is the cheapest option because you don’t have to deal with mortgages, monthly fees, interests, and penalties. You should consider if you can pay for your metal building project using your own money. Especially when the cost of building a metal home, compared to traditional houses, is less expensive and, therefore, more accessible. 

Use a Credit Union or a Bank

Going with a bank or credit union you already bank with is another option. Institutions you share a history with are likely to offer you competitive rates, especially if you have a good relationship with them. That would also mean your application will be processed faster and easier.

Use a Mortgage Broker 

To save time on going over several loan sources, you can use a mortgage broker to go over your options. They would need to have information on your financial status, credit score, and project details. They will then use this information to check with their network of lenders to see the offers that you qualify for. 


A USDA loan can be utilized as a financing option for a metal building project in eligible rural areas. These loans, offered by the United States Department of Agriculture (USDA), are primarily designed to support rural development and can cover various expenses related to the construction of a metal building. Borrowers can use USDA loans to purchase land, construct the metal building, and even cover some associated costs such as site preparation, utilities, and certain equipment. To qualify, you must meet income and credit requirements and ensure that your metal building project is located in a USDA-designated rural area. These loans offer competitive interest rates and favorable terms, making them a valuable resource for financing your metal building. If you want to learn more about USDA loans read this article.

Construction-Only Loans

If you already own land, this is your best option. Construction-only loans require comprehensive financial records and details of your project, including blueprints. Once the bank verifies that you have a sound plan and good credit scores, they will move forward with a loan for your metal building project.

Talk to Your Metal Building Contractor 

Check with the dealer or manufacturer of your metal building house to see if they offer any financing options. A lot of builders out there already offer to help with financing. This can be beneficial because the builder is motivated to work on your project and will generally strive to get better deals.

Things to Consider When Financing a Metal Building

Below are tips and things to keep in mind when you are looking to finance your regular metal building or metal building home. To make sure you are not caught off guard by surprises, read on.

Be Ready and Prepared

Ready your paperwork. Financial institutions have requirements when you apply for a loan. They want to know your plans, details on the house you’re building, the timeline of the construction, and pretty much everything about your project. In addition, you also have to prove your income. Make sure all of these are well prepared.

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Have a Licensed Contractor

Lenders are less likely to approve a loan if you’re not working with licensed contractors. Finding a builder is very critical. You need to check your builder’s license and research what others say about them. Check out our list of the top barndominium kits and builders in the country.

Be Patient

Keep in mind that financing a steel building is more challenging compared to traditional stick-built houses. These are unique construction projects, so lenders tend to be extra careful when processing such loans. Take time to gather all the essential documents mentioned above.

Credit Score is King

In the game of financing; your credit score is what is most critical. If your score is not good, it might be best to take time to do what you can to improve them. Pay off any existing debts and focus on saving money to put toward your metal building project.

Reduced Insurance Premiums

Metal buildings such as barndominiums have lower insurance costs as they don’t require as much maintenance as traditional stick-built homes. As I mentioned, they are also fire-resistant and durable enough to withstand all weather conditions. Because of this, the cost of insurance is reduced.

Exterior Finish

Lenders would like to know the structural details of your project, but they are also interested in your plans for the exterior finish. They are often concerned about a metal building in a residential area and how it would stand out. If you can make the case that your home’s exterior aesthetic will blend with others around it, that would ease their worries.

Be Okay with Moving Your Accounts

People used to be able to walk into a bank and apply for a loan even if they did not have any accounts there. It’s a different story nowadays. Lenders are interested in getting people in the door. Chances are they are more likely to accept your application if you are willing to open an account with them.

Get to Know Your Lender

Going over your lender’s portfolio is a good idea so you can have an insight into the past loans they dealt with. Lenders specializing in financing warehouses and workshops are more likely to continue doing so. On the same note, lenders with a history of financing metal buildings are likely to consider financing your metal building. Join our Facebook Group to learn from other members about their experiences with their lenders.

Resale Value

Some lenders may have difficulty appraising the value of a steel or metal building. Check with the lender in advance to ensure that the building design adheres to the local codes and building standards to avoid any issues in the future if you decide to sell your house.


What’s the difference between a Rent-to-Own and Financing a Metal Building?

Rent-to-own and financing are two different ways to purchase a building. In a rent-to-own arrangement, the tenant leases the building for a predetermined amount of time with the opportunity to purchase it at the end of the lease. Typically, a portion of the rent is used toward the cost of the building’s purchase. People who wish to start accumulating equity in a building but are not yet able to qualify for a mortgage may find this alternative useful. 

With financing, the buyer borrows money from a lender, like a bank or credit union, and uses it to pay for the home. The purchaser then pays the lender a mortgage payment each month, typically consisting of both interest and principal. 

It’s important to remember that a rent-to-own contract is a lease with an option to purchase rather than a mortgage, and the tenant won’t accrue equity in the property until the option to purchase has been exercised. In addition, there is no guarantee to the tenant that the option will be exercised at the end of the rent-to-own period. On the other hand, while financing a home, the buyer pays down the loan’s principle with each mortgage payment, increasing their equity in the property. The interest on the mortgage may also be tax deductible.

What should my credit score be when financing my steel building?

When financing a metal home, the minimum credit score can vary depending on the lender and the type of loan. The typical minimum credit score for a conventional loan is 620 or higher. If you have a higher credit score, you may be able to qualify for a lower down payment and better interest rates. This means that you can save money over the terms of the loan. Certain lenders may have higher or lower credit score requirements. It is crucial to discuss credit score requirements with lenders. You might want to compare what others’ conditions are. Check out our article on pole barn financing may have might

Is it cheaper to build or buy a metal building?

Yes and no. The answer to this question will depend on several factors, such as the cost of materials, labor, and overall building design. Purchasing a prefab metal building can be cheaper than building from scratch. You can also save time since they can be delivered and erected faster than building one from scratch. For information on financing prefabricated and modular homes, check out our article on prefab homes financing.

However, building a metal building from scratch allows you more flexibility in terms of design and layout. This means you can customize your build and potentially save more if you can source less expensive materials and labor. You will have more control of the cost, but it also comes with challenges like acquiring permits, finding the right builders, and dealing with issues along the way.

In both cases, it is also important to take into account the cost of the site preparation. You would need to prepare the foundation and utility connections, such as electricity, sewage, and plumbing. 

Whether it is cheaper to buy or build a metal building depends on the factors that affect the cost. It is recommended that you compare the cost of each option to determine the best financial decision. 

Are Metal Buildings a Good Investment?

With all the benefits of metal building homes, it is safe to assume that metal buildings are a good investment for both industrial and commercial use. Other than being more durable and requiring less maintenance, they can also be built quickly. This means less spending on labor. It is difficult to argue that they are not a good choice from a financial standpoint.

However, it is important to factor in zoning regulations, building codes, and aesthetics when planning your metal building project. Since you are interested in unique and quirky alternative housing, we also have an article on mobile home financing if you’d like to compare your options.

In conclusion, metal buildings are definitely a good investment. Alternative housing solutions are getting more popular for lots of reasons. Check out our Facebook page, where we regularly post content about alternative housing. 


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