It’s easy to get excited when jumping into a new investment, but there can be some problems that arise with purchasing or building tiny homes.

Even with tiny homes growing and becoming more popular, there are still many rules and regulations, from financing to choosing your builder or where to put the house.

Here are the Top 5 Problems with Tiny Homes and How to Fix Them.


Problem #1 with tiny homes is getting financing.

Since most tiny houses are under 400 square feet, most banks will not do a loan for a 30-year mortgage. Instead.

You may need to consider a personal or RV loan.

Personal Loans

Personal Loans usually have a length of 7 years to pay off and have an interest rate of 3% to 36%. They also require good credit, and the payments are higher due to the shorter life of the loan.

One benefit of personal loans is that banks don’t hold anything for collateral. This type of loan is an excellent option for tiny homes with foundations.

RV Loans

If the tiny home will be on wheels (THOW) and will not be placed on a permanent foundation, it will likely qualify for a 20-30 year RV loan with an interest rate of around 4%-8%.

To get an RV loan, the tiny home will need to be inspected and approved by the U.S. Department of Transportation’s National Highway Traffic Safety Administration to get an RVIA tag (Recreational Vehicle Industry Association).

Zoning and Permits

Understanding the zoning and permitting laws surrounding a tiny home is essential.

Each state has different laws, sometimes even down to the county, so make sure to do the research. If the tiny home is on wheels, there might be laws around how long it can be occupied on a specific property type. However, if the house is on a foundation, it will need to abide by standard housing regulations.

Texas is one of the most open-minded states for tiny homes, for those attached to a foundation and on wheels. As tiny houses become more and more popular, other states are jumping on board.

To avoid any problems with tiny homes and the location, do research in the area before purchasing to make sure it meets all the guidelines.


Ventilation is a problem that is often overlooked with tiny homes, especially when they are DIY built.

Due to the space inside of a tiny house being so small, the oxygen in the home doesn’t have as much room to move around. Ensuring that there is proper ventilation in the home can reduce the risks of black mold by reducing dangerous humidity levels and overall indoor air quality.

Getting Good Airflow

One way to ensure good airflow in the tiny home is to crack windows when cooking, using propane or kerosene heaters. This allows for oxygen flow, reducing the risk of deadly levels of carbon monoxide and other toxic gasses.

On cold days, tiny homes often experience high condensation levels, which can transfer into black mold, so ensuring the home is adequately vented will help reduce the humidity. Also, providing proper airflow under the mattress, which can be done by keeping the bed off the ground or using an air condensation mattress underlay.

TIP: Make sure to have carbon monoxide detectors to reduce carbon monoxide risks.

Selecting a Tiny Home Builder

As the tiny home trend continues to grow (one builder has seen a 200% increase over the past several years), more builders are joining the market. For the tiny home to see a 50-60 year life span, it’s key to be confident in the company building it.

Understanding the materials they use, if the home can be customized, what kind of warranty the builder has, etc., can make a big difference in how long the investment will last.

Using materials like SIP panels to allow for proper insulation and ease of maintenance and pressure-treated wood are just a few of the items that we recommend.

We’ve put together a list of questions to take with you when talking to a builder!

Choosing a Tiny Home Community

Finding a community of tiny homes with the best amenities can be a way to avoid problems that often arise with zoning and regulations.

These communities have already done hard work to get the location approved.

Some communities have tiny homes already placed on lots for sale, or you can choose a model to be placed on a lot. Others have spaces available for rent, which is perfect for those wanting to move their tiny home to different locations.

Most of the communities we’ve found in Texas have some incredible amenities such as a swimming pool, garden, laundry facilities, gyms, and more.

Tiny house communities can be an excellent option for those looking to live alongside like-minded people!

Choosing a Builder

Even with the problems that tiny homes can come with, there are ways to work around them and still enjoy the life of tiny living or create a profitable business such as an Airbnb rental.

We hope that we’ve provided some excellent guidance to help you along the way.

Turn Key Fabrication takes pride in making sure our customers are 100% satisfied with their build and purchase, so contact us today so we can get you started!

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