- Wells Fargo is stating that it will provide home loans for properties constructed using Icon's 3D printing method.
- Wells Fargo will offer a 50 basis point lender credit to individuals purchasing Icon homes through its mortgage programs.
- In the past, lenders were worried about the effectiveness of 3D printing in real estate, the possible increase in home values, and the feasibility of selling and insuring the loans.
- The initial Lennar-Icon 3D printed neighborhood was purchased rapidly, with a bigger one soon coming to market.
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As the competition to construct housing in a more efficient and cost-effective manner intensifies, 3D printing is gaining more traction and popularity. Nevertheless, funding for these homes remains a major challenge. This situation is about to undergo a transformation.
Wells Fargo, one of the country's leading mortgage providers, is partnering with Icon, the leading company in the 3D construction industry, to introduce a new initiative. This collaboration involves offering mortgages for homes constructed using Icon's technology and providing an incentive for homebuyers. Wells Fargo will grant a 50 basis point lender credit to those purchasing Icon homes through its mortgage services.
Icon has collaborated with the Wells Fargo Foundation, its charitable division, for multiple years to develop 3D printed communities for individuals without homes. Recently, Wells Fargo has become Icon's primary lender for 3D printed homes available for purchase.
We believe the technology developed by Icon has the potential to reduce construction expenses and accelerate homebuilding during a period when we are facing significant issues with housing affordability and access to homeownership," said Serhat Oztop, CEO of home lending at Wells Fargo. "Through this collaboration, Wells Fargo is connecting this innovative technology with opportunities for homeownership.
In the past, 3D-printed homes faced challenges in obtaining conventional mortgage financing. Banks were worried about the reliability of the technology, the likelihood of the homes increasing in value, and the ease of selling and insuring these properties. AtIcon's new Lennar communityfinished in Texas last year, Lennar's own mortgage division handled all the funding.
"Although our testing and results are all documented, having a major banking institution make such a clear and emphatic statement—'We like these houses, we're excited about them, and we're going to offer preferential treatment to them'—helps people trust and recognize that this technology, and the homes it creates, are now ready for widespread adoption," said Jason Ballard, founder and CEO of Icon.
There were worries that these homes would not increase in value as rapidly as conventional houses, but this concern seems to be disappearing. The initial Lennar-Icon 3D printed neighborhood sold out quickly, and a bigger one is currently being developed.
"We have no basis to think that the long-term value of these homes will vary from those constructed using conventional building methods," stated Oztop.
Ballard aims to extend the technology to additional builders. He mentioned that since the company was established in 2017, the objective has been to become the creators of tools and to provide these 3D printing solutions to builders and developers across the globe. He expressed his desire to "facilitate the transformation of faster, more affordable, and higher quality housing."
In this regard, Icon will start offering its latest "Titan" 3D printers to developers. This advanced technology is capable of printing multi-level structures, which previous models were unable to achieve. The cost: $899,000.
Wells Fargo will provide funding to builders looking to purchase the printers, indicating a formal endorsement of alternative construction methods.
"With Wells Fargo now, I believe it provides these builders and developers who wish to incorporate this tool into their set of resources or skillset, so to say — it gives them assurance that, 'I will be delivering a product that the market is prepared for, and I won't face unexpected challenges,' " said Ballard.
Ballard mentioned that printer sales are currently reaching roughly double the company's internal goals, with hundreds already on reserve. There are also leasing possibilities. Customers pay a $5,000 down payment and then complete training.
"It'll take us a moment to start making hundreds at once," he said with humor.
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