Tiny homes - popular among nature enthusiasts and individuals willing to live modestly - haven't been considered "real homes" on paper, according to mortgage companies. This makes it difficult for would-be homeowners to secure a loan to purchase one.
Freddie Mac and Fannie Mae may soon issue loans for tiny homes, also known as manufactured homes. The Federal Housing Finance Agency, who oversees these companies, will have to agree, Bloomberg noted. However, offering loans for these smaller houses may help borrowers without overburdening them with debt.
These two companies aren't the only ones interested in the increased demand. Other financial companies are eager to cater to this growing market.
"Things have gotten easier because everybody knows about tiny houses, so now there's a lot more companies trying to jump on that bandwagon – and not just tiny-house companies, but traditional financing like SunTrust and insurance companies," Dan Louche, owner of a tiny-home construction company, told U.S. News and World Report.
The tiny home phenomenon, while not new, could signal good news for the construction industry, as many would-be homeowners don't have enough cash on hand to pay for building tiny homes.