FCBT - Barndo Basics

Photos Courtesy of Barn Pros


This article is featured in the Spring 2021 issue of Texas LAND magazine. Click here to find out more.


A decade ago, the term barndominium may have prompted a few quizzical stares. Now the name—a blend of “barn” and “condominium”—is firmly rooted in the American lexicon. In Texas, the often steel-sided structures dot our rural landscape for purposes as diverse as the designs and finishes themselves.

Also known as a barn house or barndo, a barndominium is a dual- or multi-purpose structure that encompasses living space and a barn, workshop, or other workspaces under a single roof. Barndos are popular as no-frills buildings on recreational properties—complete with living quarters, a kitchen and even room for a few all-terrain vehicles and tractors.

That Texas is one of the largest markets for barndos doesn’t surprise Jeff Millikin. The mortgage team leader for Texas Farm Credit has seen an influx of barndo financing requests. 

FCBT - Barndo Basics

“In the past three years, we’ve financed quite a few barndos for people who use them as a temporary residence during construction of their main house; and then later as guest quarters,” says Millikin, who works in the lending co-op’s Brenham office. 

“Some of our borrowers use barndos as their primary residence.”

If you think a barndo is right for you, here are three steps to help guide your project:

1. Design with the end in mind.

According to Millikin, barndos can range from $100 to $145 per square foot for a full turnkey build. The final cost depends on various factors, including the cost of materials used and luxury additions.  

Before starting the design process, make sure your vision and budget align. 

FCBT - Barndo Basics

As part of your due diligence, ask yourself these questions: 

  • How will you use the structure? Think about the dimensions you’ll need to accommodate those activities—consider factors like ceiling height, roof pitch, door widths and storage space. 
  • Will your living space be located upstairs, incorporated as part of the first-floor slab, or a combination of both? 
  • How will you draw natural lighting into interior spaces, and heat and cool it efficiently? 

Solicit design advice from your metal building dealer. Once you’ve determined the footprint, an architect or draftsman can draw the interior living quarters to your specifications. 

Last, begin gathering ideas long before the project starts. Keep a notebook of tips and ideas that catch your eye: photos, magazine ads, paint color swatches and lighting fixture brochures, for example. Don’t overlook the endless inspiration that can be found online on sites like Pinterest and Instagram. 

FCBT - Barndo Basics

2. Partner with a trusted contractor.

Integrity and experience are key traits to seek in the builder you choose. Most bankers won’t loan to individuals who want to build themselves, so do your homework before choosing a contractor. Ask for referrals and look at other barndominiums they’ve built. 

Barndos are typically less expensive than traditional homes, but that’s not always the case. They range from homes constructed from a kit to completely custom properties, says Wayne Young, chief collateral risk officer for Capital Farm Credit in Huntsville. 

“You get what you pay for. So, beware a general contractor who tells you they’ll build a barndo for much cheaper than a stick-built home,” says Young.

FCBT - Barndo Basics

3. Secure financing.

Although barndos have established a firm footing in rural communities, commercial banks are often reluctant to finance them. Farm Credit lenders are stepping up to fill the gap. 

“We treat them as regular houses. They can be primary residences or secondary homes. As long as they’re 50 percent living, we can finance them for construction or purchase up to $1 million. We can go up to 85 percent loan to value,” says Millikin. 

“Barndos are not new to the market. However, commercial banks typically don’t have buyers for these loans in the secondary market or the expertise to appraise them,” says Trent Tyson, branch manager for Plains Land Bank in Amarillo. “Customers tell us banks advise them to come to us. It has been a great way for Farm Credit to be introduced to new customers.”

Tyson has seen a steady rise in loan applications for barndos. This volume ensures an ample inventory of comparable appraisals, a challenge that traditional banks haven’t overcome. Given their rural lending market expertise, Farm Credit lenders can often provide more favorable loan terms. There are multiple financing options available to you, and your local lender can tailor loan terms to fit your situation.

When it comes to financing your barndo, competitive terms aren’t the only benefit of choosing Farm Credit. Check with your lender to see if you’re eligible for its patronage program. Since co-ops keep only the earnings they need for stability and growth, your lender can return the surplus to you as a patronage payment. These refunds represent a portion of the interest you paid on your loans the previous year—significantly reducing your cost of borrowing. 

“Our cash patronage program puts money back in the hands of our customers, which makes borrowing from us on par with commercial banks,” said Tyson. 


What is a Barndo?

The multi-purpose barndominium concept is not new—over the centuries, people often have shared living space with their animals, crops and tools. What’s different now are the design and materials used.

FCBT - Barndo Basics

Today, most American barndos are built on a steel frame and covered with metal siding, although some structures feature a traditional wood frame and other siding materials. They may offer other unusual features such as roll-up doors and enough space to accommodate large vehicles and equipment. When the barndo is a metal structure, the owner has flexibility to finish out the interior space or to reconfigure the space later on for another purpose.

Here are some key aspects of this type of construction:

  • Usually quicker to build than a conventional home
  • Construction costs may be
    less, depending on features and finishing materials
  • Lower maintenance costs
  • Often more energy-efficient
  • Fire- and pest-resistant if metal 
  • Design flexibility—less permanent than a conventional home

Tags:

  • FARM CREDIT BANK OF TEXAS, headquartered in Austin, Texas, is a cooperatively owned wholesale bank that is part of the nationwide Farm Credit System. Their mission is to enhance the quality of life in rural America by using cooperative principles to provide competitive credit and superior service to our customers. Find out more at FindFarmCredit.com.

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