Real Estate
November 15, 2018
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What to look for when getting a mortgage on a manufactured home

By: Scott Sheldon
November 9, 2018

If you’re looking to borrow money to purchase or refinance a manufactured home property, you’ll want to pay close attention to this information.

A manufactured home is property that was constructed in a factory moved over on a flatbed truck and then affixed to the earth. A prefab home or modular home is property that is built in pieces on a foundation from the ground floor up. Prefab homes and modular homes are treated by mortgage lenders as the same as a single-family residence.

Manufactured homes can be especially difficult for mortgage lenders because these present a higher risk as there is belief that the property could be detached and subsequently moved. The only types of financing that are available for manufactured homes is the Residential Mortgage space.

Most common loan types are FHA 30-year fixed-rate mortgages and conventional fixed-rate mortgages. The financing options that are available for these property types are very limited as this type of property is considered a risk for lenders. Here is more information that you need to know when you are financing a manufactured home.

The manufactured home cannot have been built before June 15th, 1976. If the property was built before it is ineligible for financing.

Additions built to the home are big. One of the other things that can come up in the process during the appraisal is whether or not there are any additions to the property or if you made any additions to the property in any way shape or form on a manufactured home that will trigger the appraiser to notate that in the appraisal report which in turn will cause the lender to ask for an engineer certification report. The engineer report says that the property is safe and structurally sound and there’s no other issues or problems associated with it. If the engineer reports any issues with the home those will need to be fixed prior to closing escrow. If no addition to the home occurred no further discovery into the integrity of the property is needed.

Home being previously moved can present an issue. Ideally, the home would have been attached to the land one time and not previously moved. If the unit was previously moved this can pose an issue for an FHA loan as the loan is not insurable if the unit was previously moved.

A manufactured home in a park is eligible. If you have a manufactured home in a planned unit development with homeowner’s association dues (HOA), this is an eligible property type for a lender who offers manufactured home loans.

VA financing is available for manufactured homes.

To identify whether the unit is eligible these things are also needed; DMV HUD plates, typically found in the kitchen. If the tags do not exist or have been removed, then the identifying information can be found from the Institute for Building Technology IBTS which also could identity the year in which the home was built. Lender will order a preliminary title report which has the 433 filed with county representing a manufactured home.

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Scott Sheldon is a local mortgage lender, with a decade of experience helping consumers purchase and refinance primary homes second homes and investment properties. Learn more at www.sonomacountymortgages.com.