Naming Names: Straw Bale Construction Loans

Written by Andrew Morrison

stack of money on top of plansThis being 2008, obviously the real estate market has taken a huge loss around the world and things continue to look bleak. How this affects people wanting to build a straw bale home depends a lot on their local conditions.

The first and most obvious place of impact is in the mortgage industry. The industry has tightened the reigns on all of its loans and interest rates, although dropping due to governmental actions, may not be what you want once the points and other impacts are added to the loan. The biggest issue here for people wanting to build a straw bale house is the willingness of a bank to actually give straw bale construction loans right now. In the past, it has been difficult to find willing banks, smart enough to step into this growing niche market. Now, things are even harder. Most banks want to loan only on the things they KNOW are safe. Taking risks is not in most banks’ vocabulary right now.

So what to do? It is likely time to revert to the old ways of getting a loan for a straw bale house: Using the term “cellulose insulation.” Instead of telling banks you are building a straw bale house, tell them you are building a post and beam home with cellulose insulation. This takes away the red flag of “Straw? Are you serious?.” Unfortunately, finding a bank willing to loan on bale homes is simply going to be harder in this environment. Harder that is until banks start to see the wisdom in the construction.

One thing we are seeing around the world is rising energy costs. It is true that the cost of a barrel of oil is at a long term low right now, but overall energy costs are still climbing and will continue to do so as we move forward. A bale home is a strong answer to this situation due to the high insulation value and the use of natural, renewable materials. Banks will, hopefully, eventually start to see the wisdom in supporting such construction methods. Some banks will lead the way and others will follow. Finding those leaders may be the task of OUR time.

If you have a bank that you know of that has loaned on bale homes, please post the contact information here. I want to support these banks and drive business their way. Let’s help grow this industry together.

1. Bank of Oregon – Contact: Jeff Case – (541) 842-5602 – Email: [email protected]
2. ****Your Bank Here!****

Another road block to financing a straw bale house can be finding comparable sales. There are ways to manage this hurdle as well that are simple and clear. For a full list of hurdles and how to overcome them, please review my blog post entitled “Financing and Straw Bale Construction” by searching at the top of

15 Responses

  1. Thank you for this post! We’ll be building in about a year, and getting financing is a big concern of mine.

    The only good thing is that in Austin,Texas, the economy is not too bad, (we live right outside of Austin) and being a “green” city, I’m hoping we won’t have too much trouble.

  2. Hi Andrew,

    We had a very positive experience with Rogue Valley Farm Credit Services. Because our SB home is located on the same piece of Agricultural land as our Nursery business, conventional banks wouldn’t even consider us – regardless of the strawbales. I’d imagine this situation – with the home builder working and deriving his / her income from the same property as their proposed SB home – is pretty common.

  3. Bank of Northern Michigan – Contact: Larry Kuhnke – Email: [email protected]

    Larry is a “follow the rules” personality, and very hard to get sympathy from …. but he was willing to see the value in our steel/strawbale build. In fact, I think it was easier getting financed than most stories I have heard. You MUST accept that you will need a cash-flow of your own, as their construction loans will give you nothing till services are complete, or materials are on-site. This has proven to be our biggest stress, as we could not build as fast as we could have had we been able to have the “power of money” behind us.

    Hope this helps a fellow Northern Michigonian …
    Meaghan Malleaux

  4. We were able to receive a construction loan from Columbia River Bank in Pendleton, Oregon. Unfortunately, they are no longer providing residential mortgages. However, we are pretty sure that they will help us since they will not want to be stuck with a construction loan that will not roll over into a mortgage.

  5. Andrew I am still looking for grant money to do a straw bale house in Sweet Home. If you hear about anything that will help us get our house built and out of this trailer court let me know.

  6. I found your blog on google and read a few of your other posts. I just added you to my Google News Reader. Keep up the good work. Look forward to reading more from you in the future.

  7. Are there any lending institution willing to provide the takeout loan on a new construction straw bale home? I live in Idaho.

  8. Funding has gotten tighter since the economic crash. Unfortunately, the banks are all less willing to lend on “alternative projects” especially if there is an owner/builder involved. That said, there are several “Green” banks out there willing to loan on appropriate technology houses and straw bale homes often fit that criteria. Try contacting the folks here: and see what they have to say or if they can forward you to another, more local, option. Even some larger companies like Bank of America, Citigroup, and J.P. Morgan Chase are trying to jump on the Green bandwagon. My suggestion is that you apply for a home loan for a post and beam house (assuming it is) and refer to the straw bale infill only as “infill insulation” or “cellulose insulation” when working with the larger companies. The one caveat to that is to make sure that there are no exclusion properties in the loan that will leave you high and dry once the banks determine that the cellulose is in fact straw bales. Be sure to read your loan documents from start to finish and ask questions about anything unclear so that you are 100% confident you will be able to complete your project with the funding in place.

  9. Are there similar references available for Canada, specifically in Quebec? We have just encountered this roadblock in the planning stage, so we still have time to figure it out. However, the sooner we can solve this, the sooner we can putting things into action. Thanks!

  10. Hi Alan. I don’t know any specific banks in Quebec although I would venture to guess they do indeed exist. Try to contact the folks at this page to see what they know from experience.

    Here’s the link:

    You can also review the mortgage companies on this page to see if there are any that would work for you. Good luck and remember to send us pictures throughout the build. We love seeing new houses go up and we might even ask to feature your home on!

    Here’s the link for mortgage companies:

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