How To Finance A Tiny Home

By Kelly Kassian

Dreaming of going tiny? You’re not alone — tiny homes are an affordable, simple, and flexible way to own your space without a massive mortgage.
But how do you pay for one?

Traditional mortgages rarely work

Most tiny homes don’t meet standard mortgage requirements (like size or permanent foundation).

Tip: Don’t waste time chasing traditional mortgages unless your tiny house is over 400 sq. ft. and permanently installed.

Here’s how real tiny homeowners do it:

  • Personal Loans — Fast, flexible, no collateral, but higher rates.

  • RV Loans — Perfect for tiny homes on wheels. Must be RVIA-certified.

  • Builder Financing — Many tiny home builders offer in-house payment plans.

  • Chattel Loans — For movable homes, but with higher risk.

  • Cash or Savings — The simplest, interest-free option if you have funds upfront.

  • HELOCs/Home Equity Loans — Tap your existing home’s equity if you own property.

Flexible loan options exist

What to know BEFORE you sign

Land is separate

You may need a land loan or to rent a plot.

Zoning & Permits

Local laws vary — always check first!

Moving Costs

For mobile tiny homes, you’ll need a truck and transport budget.

Depriciation

Tiny homes, especially mobile ones, can lose value like vehicles.

Costs to expect

  • DIY kits: ~$20,000+

  • Prefab models: $30,000–$60,000

  • Custom builds: $100,000+


    Don’t forget utilities, permits, furnishings, and land!


Test it first

Not sure if tiny living fits you? Rent a tiny home for a weekend to try it out.

Backyard Pods: A Smart Alternative

Want a tiny home vibe with more resale value?

Consider an ADU (Accessory Dwelling Unit) like a Backyard Pod — permanent, fully serviced, and legal in most areas.
Many homeowners finance Backyard Pods using personal loans, builder financing, or home equity.

You don’t need a giant mortgage to live small.
Explore flexible loan options, understand the true costs, and choose what fits your lifestyle and budget.

Ready to make your tiny home dream real?
✅ Compare rates.
✅ Check zoning.
✅ Contact Backyard Pod for design + build options.

FAQs About ADUs and Tiny Homes

What’s the difference between a tiny home and an ADU?

A tiny home is usually mobile and under 400 sq. ft., while an ADU (Accessory Dwelling Unit) is a permanent secondary structure on a residential lot.

Can I finance a Backyard Pod?

Yes. Many homeowners use personal loans, builder financing, or home equity lines to finance their Backyard Pod.

Is a Backyard Pod legal in my area?

Zoning laws vary, but most California municipalities allow Backyard Pods as ADUs. Check with your local planning office.

Do Backyard Pods come with utilities?

Yes. We design and build them to include water, power, and HVAC based on your property’s setup.

How long does it take to install a Backyard Pod?

Installation typically takes 3–5 months from permitting to final inspection.

Can I live in a Backyard Pod full-time?

Absolutely. Many customers use Backyard Pods as in-law suites, rentals, or full-time residences.