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Hangar financing?

R

rookie1255

Member
Looking into a Morton hangar on my own 40 acres. Does anyone know any banks that would finance this? I guess it would be considered a construction loan.

I would like it attached to the house but I didn't know if it would look better to a bank if it was detached. It wouldn't need living space or plumbing/bathroom, but those might make it more residential and easier to fit for a construction loan. Who knows.

Before anyone suggests getting an HE line on the primary residence, that's already been done and the funds used for business stuff. I just wanted to see if anyone had any experience with this type of hangar financing.

My construction loan for the RV-10 was thru 1st Pryority bank and they've been great. It'd be nice to find someone equivalent to do the hangar.

It's tough being poor and into aviation. Thanks in advance for the help.
 
Advice from my banker

Use a line of credit instead of a construction loan. The construction loan includes a lot of requirements (more work) for the bank in order to authorize draws. Also, the interest rate is typically higher on a construction loan due to inherent risks of completion.
 
Line of credit

Yeah, but with the house mortgaged, a line of credit based on what? Plus would the amount be enough to get a decent (or dream) hangar?
 
Since you have 40 acres, it may be beneficial for you if you build it under "agriculture." i.e: permits, taxes, inspections, loan.
 
rookie1255 said:
Yeah, but with the house mortgaged, a line of credit based on what? Plus would the amount be enough to get a decent (or dream) hangar?
Click to expand...

If you have more than 20% equity in your house you can set up a home equity line of credit based on that. Interest will become tax deductible which is always a plus.

Otherwise you'll have to do a construction loan and will typically need 20-30% down and as stated above, will be based on draws and construction progress. You might also qualify for a 'signature' type loan that won't be tied to any collateral but will have fairly high interest rates. Probably have low loan limits too.
 
This is very personal and each situation is unique. However, generally speaking, most banks will more readily loan on an addition to your home than they will a separate structure (out building). This has been my experience.
 
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