Thermostatically controlled heat in every room for 30 yr fixed??

4 Replies

I bought a lakefront cabin and turned it into a short-term vacation rental. When i was working on the financing the underwriters at the bank, a large one, i use on my primary residence said they couldn't finance the property because it didn't have a thermostatically controlled heat source in every room...I worked with a local bank and got into a 3 year ARM.

The cabin is 600sq feet and has a living area, kitchen, bathroom and bedroom.  The main heat source is a propane wall furnace with a thermostate that heats the whole place no problem.

The place was meant to be a 3-season cabin and I've done a bunch of work to it to make it more livable year round.  New roof, new ceiling, upgraded appliances, spray foam insulation in the crawlspace, added a heater to the crawl space etc... 

I want to eventually refinance into a 30yr fixed, considering under a business entity for liability reasons.

My question is did they pass on the financing because it was a 3-season house at the time or is there really some rule about thermostatically controlled heat sources?

Is it as easy as adding an electric baseboard heater and now i can qualify for conventional financing.

Let me know if anyone has any expertise in this stuff



Nich J.,

I have not dealt with this myself, but a good friend just bought a personal residence using I think an FHA or USDA loan and had similar thing come up. His only had a wood stove centrally located with no other heat source but was used as a year round home. He was able to just do the electrical baseboard in each room and that WAS good enough for his loan. Pretty low cost also.

Dan Dietz

IMO, must be some kind of  local building code issue in an area with heavy winters.  Sometimes we just have to submit to the requirements if we wish to get to the goal.

Hi Nich J.,

At the Agency level there is no such requirement with that level of specificity, so I'm guessing this is a local building code thing.

In California for example, homes must have a permanent heat source. But it's ambiguous about what it must be so, like you said, sometimes I have people throw in a baseboard heater. 

It must be permanent, so it can't be a visible wall socket plug in type setup. But what happens behind the sheetrock, you can't see. I've never specifically told anyone to do it this way, but I'm going to guess that sometimes it's a cheapo <$100 special with a wall socket, that's simply plugged in behind sheetrock.

Nich J., personal experience here in the opposite direction in Florida.  We were denied financing because of lack permanent air conditioning in two rooms.  But, the issue was not really air conditioning.  It was appraisable square feet.  The two rooms couldn't be counted as lendable sq ft without air conditioning.  Seller came down and We put higher down.  completed the rest of the addition and for just a few dollars ran duct into those two rooms and voila free sq feet.

Check if it's just an appraisal thing - or like others said, a local codes issue considering where the property is.

Join the Largest Real Estate Investing Community

Basic membership is free, forever.

By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.