Trish Best lives in a floating home and loves it.

"It's wonderful," says the co-owner of Sea Village Marina in Northfield, N.J. "You look out your windows and you always see water. You look out and see different birds and turtles and fish."

And, she adds, you don't have to mow the grass because there isn't any. You can moor a boat in the backyard.

Floating homes pique the imagination. When they were kids, your grandparents might have been captivated by "The Bobbsey Twins on a Houseboat." In 1958, moviegoers watched Sophia Loren and Carey Grant (playing a widowed father) fall in love on a "Houseboat." Later generations envied the floating-home lifestyle of Tom Hanks' character (a widowed father) in "Sleepless in Seattle."

You don't have to be a widowed father to buy a floating home. You do need to live in a place where floating homes are available, and you have to prepare yourself to pay a higher interest rate than you would pay for a mortgage on a regular house.

Parlez-vous floating home?
First, a vocabulary lesson.

A floating home is not a houseboat. A houseboat can move under its own power. A floating home can't move on its own and is intended to remain permanently where it is built. Houseboats look like boats and are analogous to recreational vehicles. Floating homes usually look like houses and are analogous to -- well, houses.

Take the Best home. Trish's husband John built it in the early 1980s. It has a living room with a 28-foot ceiling, a sauna, two bedrooms and two baths. It has a fireplace and wood floors. "It's not quite conventional, but it's something you could put in the ground and say it's a beautiful home," says John Best, who built all 54 floating homes in the marina on an island between Atlantic City and Ocean City.

The floating-home-building part of his career ended when New Jersey banned their construction for environmental reasons. On the other side of the country, Seattle's city council has put a moratorium on new floating homes on Lake Union to ensure public access to the lake.

Such moratoria don't ease the scarcity of floating homes, and they buoy resale prices. But that doesn't mean floating homes are unaffordable for regular folks. Trish Best says three-bedroom floating homes in her vicinity can sell in the neighborhood of $120,000. A one-bedroom, one-bath floating home in Portland, Ore., listed recently for $80,000. Real estate agents in the San Francisco Bay Area tout floating homes as affordable housing because the buyer doesn't necessarily buy real estate; land is notoriously pricey in the Bay Area.

When you buy a floating home, you have to pay for the dock and slip. Some marinas lease slips and dock space, short-term or long-term; others sell a home's dock space in a condominium arrangement. Still others sell a home's share of the dock as a co-op. If you buy dock space instead of leasing it, you can finance that, too.

In most states, a floating-home loan is classified somewhere between a mortgage and a personal loan. "Consumers are used to hearing the word 'mortgage,' but it's not a mortgage like a standard mortgage you can get on a dirt property," says Rick Phillips, lending officer for NorthStar Bank in Seattle.

In floating-home lending lingo, a 'dirt property' is a house that rests on dirt. No offense intended.

A typical floating-home loan with NorthStar has a 25-year term and a rate that adjusts periodically. The borrower can elect to get a loan that adjusts annually or every three or five years. Rates are based upon an index published by the Federal Home Loan Bank of Seattle.

As of July 25, that meant a 3-year ARM rate of about 7.325 percent to 7.5 percent and a 5-year ARM rate about three-quarters of a percentage point higher. That's quite a bit more than what owners of dirt properties would pay, and borrowers with imperfect credit, low down payments or leased docks would pay a slightly higher rate.

Phillips says closing costs on loans for floating homes tend to be lower than for mortgages. NorthStar charges a loan fee of 1.25 percent.

Down the coast in the Bay Area, Financial Benefits Credit Union in Alameda offers 15-year loans that adjust twice a year based on the 11th District Cost of Funds Index; right now the rate is 7.25 percent. Over in New Jersey, the Bests say Wachovia is the only lender that will underwrite a loan on a floating home in their marina. A typical loan is for 15 years, with a rate about 1.25 percentage higher than for 15-year mortgages on houses on land. In late July 2002, that's about 7.25 percent.

The buying process is roughly similar to that of buying a regular house. Someone will check title records or Uniform Commercial Code filings for any liens. The lender will require an appraisal. The buyer and possibly the lender will want a marine inspection. The lender will require insurance.

There is very little chance that an insurer will have to pay a claim for a sunken home. John Best boasts that the houses he built survived two hurricanes in the '80s. "When the island floods, we float -- because we go up and down with the tide," he says.