Blu Homes

Treehugger calls Blu’s folding technology “the single biggest advance in the industry in years” !

Read the full article here: http://www.treehugger.com/files/2010/02/blu-homes-unfolds-reinvention.php

Winter is great time for regrouping and laying out your plans for the warmer months ahead – as just the planning stages of building a new home or structure can take months!  And thanks to generous tax credits given to both qualified first time home buyers and repeat home buyers, it is also a great time to move forward on building your Blu home and take advantage of cash-back tax savings of up to $8,000.

Federal Tax Credit

Federal legislation changes in November 2009 expanded and extended tax incentives for first time home buyers and in some cases, repeat home buyers. With this legislation, first time home buyers can receive a tax credit of up to $8,000; and repeat home buyers can receive a tax credit of up to $6,500. This means that if you are buying a home for $150,000 and put 10% down, or $15,000, you could recoup more than half of your down payment. That’s a huge savings!

However under federal guidelines, eligible home buyers must purchase or enter into a binding contract to purchase on or before April 30, 2010 and close by June 30, 2010.

Given our current building and delivery schedule, we have a limited number of homes that can be installed by June 30^th and meet this deadline – we would love to build your Blu home AND make sure you can achieve these savings, giving more opportunity for integrating extra green features, or just decorating and setting up your new Blu home.

 For full details about federal tax credits please visit:  http://www.federalhousingtaxcredit.com/home.html or http://www.irs.gov/newsroom/article/0,,id=204671,00.html

Check out this great new video of Blu Homes co-founders Bill Haney and Maura McCarthy talking about how Blu delivers homes in practically any weather conditions:

One of things that is so cool about Blu homes is that our frames are built with an innovative wood/steel hybrid, which allows us construct the entire home in our factory, fold the structure, affordably transport it to the site, and then quickly unfold it on site as a complete house, unlike most factory-built homes that ship separate modules that need to be pieced together.

 Blu’s folding is an incredibly spectacular process to watch:

Our customers often ask us what makes folding so beneficial.  Here is our top ten list of the benefits of folding:

1. Blu homes are easier and more affordable to ship because the homes fold to as small as 8 feet wide, minimizing special permitting and extra costs to transport.
2. Blu homes are larger than any other modular building because they can unfold as large as 20 feet wide. 
3. Folding also creates higher ceilings, giving Blu homes a larger and more spacious feel.
4. Blu site work is fast because the home is already assembled.
5. The quality of our site work is better because the unfolding process is so fast that we are able send Blu’s skilled and highly trained staff to each installation, rather than relying on general contractors who are unfamiliar with the house. 
6. The small size of our shipments allows us to deliver via narrow roads and tough-to-reach sites.
7. Our relatively small shipments (typically one truck instead of multiple vehicles) reduces shipping pollution.
8. Factory construction creates less waste.
9. Our steel frames not only makes Blu’s buildings and homes more durable for folding & shipping, but also makes them sturdier for tough weather conditions – earthquake areas, flood zones, high wind areas.
10. Folding allows us to deliver our homes affordably, anywhere!

Blu co-founder Maura McCarthy is in Las Vegas for the International Builders Show (IBS), the largest annual building industry tradeshow in the country.

On Wednesday, January 20, she will be a panelist for the education session “Modular Homes 101.”

For full details about the event visit http://www.buildersshow.com/Home/Page.aspx?pageID=1.

Maura, have fun in Vegas and bring the warm weather back to New England with you!!

Check out these beautiful new renderings of our Origin homes!

Additional views can be found in the Origin section of our site: bluhomes.com/our-homes/origin/renderings.  Enjoy!

We held our first open house just before the holidays to an enthusiastic and steady stream of homebuyers.  Guests met our crew, toured the factory and got a glimpse of our new Element line.  It was a lot of fun!

In this photo VP of Operations Trevor Huffard demos a model of Blu’s unique folding technology as Maura McCarthy (VP of Sales & Marketing) and Michele Perry (Director of Communications) look on.

Yesterday we unfolded a beautiful new Blu home in Rhode Island. Two feet of snow was no deterrent! It was an amazing day and the owners are happy to be ringing in 2010 with their dream home!

One of the most confusing parts of building a home right now is understanding the way construction loans work. There are differences between the mortgages for purchasing an existing home and mortgages for construction loans. Having a mortgage for an existing home or being pre-approved for a loan does not necessarily mean that a construction loan will be as easy to get.

With loans for existing homes, banks are taking on less risk because they have the house and land as collateral. With a construction loan, there is not yet a house that can be easily sold in the event of a default. And since the credit market has tightened, the kinds of ratios and requirements for equity makes it challenging to finance a new home construction project. Banks are looking for buyers to provide more equity or cash for new construction projects than they have in the past, to balance this risk of default.

The bottom line is that in order to get most construction loans in the current market., typical buyers need about 30-35% equity in the form of cash or existing land ownership.

There are two issues at play here–appraisals and “loan-to-value” ratios. Although down payments on construction loans – or your “equity requirement” – might technically be only 5% or 10%, this presumes you have an appraisal that values your home significantly higher than the cost to build. Appraisals have become much more conservative in the down market, and in addition to that, the loan-to-value ratio at which banks will lend has generally gone from something like 95%, down to 70% or so, even for clients with very good credit.

For these reasons, it is important to understand the constraints of obtaining a construction loan in the current market.

Let’s work through an example to see why.

1) Jane has an excellent credit score of 750 and has a history of fiscal responsibility. She has saved up significant equity for a down payment – let’s say $20,000.

2) With her income level, the bank says that she could probably get approved for an additional $200,000 for the house cost.

4) Once she has all the bids in from her home provider and builder, she is ready to start the construction loan. The loan officer says great, but there’s just one last small detail, the APPRAISAL. Jane is confident the appraisal will be fine because she’s been judicious about designing a house that is within her total approved loan amount.

5) The appraisal comes back and is right at cost goal – the appraised value is $200,000. Unfortunately, however, the bank’s loan-to-value ratio, which used to be 95%, is now 75%. The loan officer explains: “Well, your appraisal is at $200K, and with the credit downturn, we will only loan 75% of that $200K appraisal, or about $150K.” This means that Jane now needs to come up with an extra $30,000 in equity in order to do her $200,000 project

6) Jane tries to get the appraisal up. After taking a second look, the appraiser values the future home build project at $220,000, but does not feel he can go any higher. Thus the bank would now loan up to $165,000 (75% of $220K).

7) In the end, Jane has to find an extra $15K in equity to do her project, OR try to create a project that will cost less but still be highly valued. This is obviously hard to do as it presumes that you can PLAN to build a house that will be worth 20-30% more than you pay for it. This does not usually work in free markets.

In effect, the banks’ lower loan-to-value ratio means that their construction loan portfolios decrease a great deal.

In general, in this economic environment, it is much easier to get by this loan-to-value ratio issue if you already fully own land or have a significant amount of equity in your land, as the equity value of that land is included in the calculations.

If you do not own land and have only about 10% equity, as Jane did, it is going to be hard to get a construction loan. In effect, in the current environment most buyers need the equivalent of about 30-35% equity in either land or cash, in order to do a construction loan through most banks.

The market environment is changing all the time, so it may be that the lending environment will get better in the coming years. But as long as the credit market is tight, it is better to be prepared, so that building your dream home is an easy and fun process!

Images of a Blu home interior will be shown on tonight’s “Extra.”   The clip will be featured in a segment with host Mario Lopez.  For local broadcast times click here .  Be sure to tune in!