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In the race to build housing more efficiently and affordably, 3D printing is becoming increasingly viable and popular. Financing for the homes, however, is still a significant hurdle. That’s about to change.
Wells Fargo, one of the nation’s largest mortgage lenders, in conjunction with Icon, the biggest player in the 3D construction space, is announcing that it will write mortgages on homes built with Icon technology and also offer an incentive to buyers. Wells Fargo will provide a 50 basis point lender credit to buyers of Icon homes using its mortgages.
Icon has been working with the Wells Fargo Foundation, its philanthropy arm, for several years on 3D printed communities for people without housing. Now Wells Fargo will be Icon’s preferred lender for 3D printed homes up for sale.
“We think the technology that Icon has built has the potential to lower construction costs and to speed up homebuilding at a time when we are seeing broader challenges in housing affordability and access to homeownership,” said Serhat Oztop, CEO of home lending at Wells Fargo. “Through this partnership Wells Fargo is bridging the gap between this new technology and access to homeownership.”
Historically, 3D printed homes had difficulty getting traditional mortgage financing. Lenders had concerns over the viability of the technology, the potential value appreciation of the homes, and the ability to both sell and insure the loans. At Icon’s new Lennar community completed in Texas last year, Lennar’s own mortgage arm did all the financing.
An ICON 3D printer at a housing development in Georgetown, TX.
Diana Olick | CNBC
“Even though our testing and our results are all in the books, having one of the big banking players make such a strong and pointed announcement that, ‘We like these houses, we’re excited about these houses, in fact, we’re going to give preferential treatment to these houses,’ helps people believe and understand that this technology, and the houses it produces are ready for primetime,” said Jason Ballard, founder and CEO of Icon.
There had been concern that these houses would not appreciate at the same rate as traditional homes, but that appears to be fading. The first Lennar-Icon 3D printed community sold quickly, and another, larger one is now in the works.
“We don’t have any reason to believe that the long-term value for these homes will be any different from homes that are built based on traditional construction technologies,” said Oztop.
Ballard wants to expand the technology to other builders. He said since the company was founded in 2017, the goal has been to become the toolmakers and to put these 3D printing tools into the hands of builders and developers all over the world. He said he wants “to enable the revolution of higher speed, lower cost, higher quality housing.”
To that end, Icon will now sell its new “Titan” 3D printers to developers. This new generation of technology can print multistory structures, something earlier versions could not. The price tag: $899,000.
Wells Fargo will offer financing to builders interested in buying the printers, signaling institutional confidence in alternative construction.
“With Wells Fargo now, I think it just gives these builders and developers who want to put this tool into their quiver or into their toolbelt, so to speak — it just gives them confidence that, ‘I’m going to be delivering a product that the market is ready for, that I’m not going to run into unforeseen hurdles,'” said Ballard.
Ballard added that sales of the printers are already running at about twice the company’s internal targets, with hundreds already reserved. There are also leasing options. Buyers put down a $5,000 deposit and then go through training.
“It will take us a minute to be able to produce hundreds at a time,” he joked.
