An Earthship home is made from natural and unrecycled materials and is powered by solar energy. These homes are intended to be “off the grid” with little or no reliance on public utilities and fossil fuels.
According to Wikipedia, an Earthship home has to incorporate the following six principles: 1) thermal/solar heating and cooling; 2) solar and/or wind electricity; 3) contained sewage treatment; 4) building with natural and recycled materials; 5) water harvesting; and 5) food production.
The La Plata County building department will permit Earthship homes, although they need to be designed by an architect or engineer in order to be permitted. The county wants to be certain that the structure is safe for occupancy.
Most homes that are referred to as Earthship homes do not meet 100 percent of the requirements.
The major challenge when buying or selling Earthship homes is the difficulty in securing financing. Lenders are reluctant to provide financing on homes with limited marketability because they will be more challenging to sell in the event of a foreclosure. There is no financing available for a true Earthship home from the FHA, USDA, VA or conforming conventional sources, so a buyer cannot obtain financing with a 30-year fixed loan with less than 20 percent down. Some local banks will provide short-term fixed financing that converts into an adjustable loan with a large down payment.
The other challenge with true Earthship homes is determining their value. Real estate appraisers primarily rely on the recent sales of nearby similar homes to determine the value of the property being appraised. Because there are very few of these homes and very few sales, it makes the valuation process difficult and results in a value that is very subjective.
If a home meets some of the Earthship requirements but is primarily standard construction, connected to the power grid and has a well or central water, financing from all lending sources may be available because they will be considered primarily a traditional home.
When considering buying or constructing an Earthship home, you should weigh the desirability and benefits of this type of construction against the limited marketability and inability to secure the most competitive financing.
Steve Setka is an exclusive buyer’s agent with Keller Williams Realty in Durango and a licensed mortgage originator. He can be reached at 903-7782 or firstname.lastname@example.org.