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Home loans for prefab homes


Prefab homes have taken a strong foothold in the current housing market. With such a broad variety of innovative housing solutions now readily available under the ‘prefab’ umbrella, buyers are looking increasingly to these types of houses as their new build solution. From transportable homes, modular homes, and kitset homes the options are seemingly limitless, but financing these homes sadly isn’t. 

As the majority of the work on a prefab home is completed off-site, accessing a construction loan can be complicated with banks typically being unable to take security over the property until the dwelling is onsite.

As one ASB spokeswoman puts it, "From a responsible lending and risk perspective, banks will not lend without security, or lend an amount greater than the value of the security." As it can be difficult to recognise the value of a home until it is attached to the land, it’s not easy to establish a one-size-fits-all which has meant most prefab home loans thus far have been granted on a case-by-case basis.

Accessing a loan for a prefab home is made simpler when a buyer already has the security of existing land or property a bank can lend against. However, for first home buyers, without existing equity to borrow against prior to the house being delivered, securing a loan for a prefabricated home, until recently, has proved virtually unachievable. And this is despite prefab homes being such a viable choice for first home buyers due to their streamlined and simplified process and comparable affordability.

South Island prefab homeFortunately, over the years, the growing popularity of prefab homes and their efficient build results have seen people grow a keen interest in this innovative way of building. With both buyers and now banks recognising the immense benefits this kind of investment can yield, the process of securing a loan for such a home is improving. And we’re thrilled to share with you now that accessing a loan for a Genius Homes prefab just got a whole lot easier too!

BNZ's new funding for prefabricated homes

It is with great excitement that the Genius Homes team announce the development of a partnership with BNZ, which began earlier this year. This partnership supports funding for prefabricated homes, land and site services and will be available to first home buyers, as well as existing owner-occupiers and investors too.

The funding partnership will simplify the home loan process for prefab homes and open up prefabrication as an opportunity for first home buyers who may have otherwise been unable to secure a loan for this kind of dwelling previously. 

The approach will compare similarly to a conventional construction loan ensuring builders are paid at each stage of the build whilst establishing ownership of the work in progress by BNZ and the customer. This will give the bank security over the prefab home itself, enabling funds to be granted prior to the dwelling being onsite. The bank will also take security over the land and on the whole enable the project to proceed like that of a conventional house build, with funds being released at various stages of the build. This allows prefabrication to become a much more feasible solution for all buyers interested in prefab homes.

Learn more about the BNZ partnership here ›

Prefab homes for first home buyers

BNZ’s funding for prefabricated homes unlocks the door for first home buyers. Prefab homes have always appealed as an attractive first home solution for first home buyers and for good reason. As a more affordable and streamlined process, prefab homes are an excellently attainable new home solution. 

Home loans for prefab homesSimilar to that of other construction loans, the bank will generally be able to lend 80% of the total project. This means that unless you have equity in an existing house or land, you’ll need to produce a 20% deposit.

It’s always good to check your eligibility for a First Home Grant. Buying new could increase your first home grant prospects to up to $20,000. This, alongside Kiwisaver funds, personal savings, and gifted funds from family can all work together to secure your deposit on a new home.

Important prefab funding considerations

The new BNZ prefabricated home loan* comes with a few specific requirements. Some of which are listed below.

  • Is the location where you plan to site your prefab home your own land with freehold title?
  • If you don’t have a freehold title, what arrangements have you made with the landowner so that you can site your prefab home on the land?
  • If you plan to borrow from a bank to fund your prefab, know that the bank will expect to take security over the land as well as the prefab home.
  • You will still need to make up the required deposit. This can come from a combination of sources such as Kiwisaver, cash or equity release from another property.

*All funding applications are subject to BNZ’s lending criteria, terms and fees. Further eligibility, credit and other criteria may apply. To find out more, talk to your BNZ banker.

Prefabs for first home buyers

Advice to prefab home buyers

If you’re looking to buy a prefab home as a first home, an investment property, a second dwelling or for any reason at all, the best place to start is to talk to the experts. At Genius Homes we know prefab homes inside and out and we’re always happy to help. 

By reaching out to the team in the early stages of your new home journey we can give you a realistic idea of what to expect budget-wise, we can let you know whether your site is right and sufficiently accessible with a FREE onsite consultation and we can even give you advice for sorting finance and securing a loan for your new home, or help point you in the right direction. 

Alternatively, you can get in touch with a BNZ representative specialising in prefab home projects. And be sure to obtain legal advice as you enter into a home agreement also. This prefab partnership exists to support you and open up the possibility for more kiwis to own warm, dry and quality new housing, customised to them and their family. 

Keen to find your perfect prefabricated home? Download our designs brochure to find your dream design, by clicking the link below.

Download the ultimate guide to choosing a prefab home