If you're a home buyer looking for housing options other than traditional site built houses which cost you more, then mobile/manufactured home may be the right choice for you. Mobile homes are first built in factories and then taken to the site where it may or may not be given a permanent foundation. There are 2 options when it comes to financing your mobile home. Check out the financing options and the topics as given below:
What are the types of mobile home loans?Mobile home loans or manufactured home loans are available as mortgage and personal property loans. - Mobile home mortgage loan: If the home has a permanent foundation, you may take out a mortgage loan for buying both the land (lot) and home, or either the land or home. The loan covers the cost of your home as well as any repair work done on the lot depending upon whether the appraised value is equal to the selling price of the mobile home.
You can approach local banks, lenders, mortgage companies, brokers, and credit unions for loans to purchase or refinance mobile home. When you apply, the lender will ask for credit report fee, loan application fee, loan doc preparation and origination fees etc. Get a good faith estimate from the lender to get an idea of the costs involved. Also, know how to qualify and what options are available.
- Personal Property loan: This is meant for purchase of homes on a rented lot as in mobile home parks. Personal property loan is offered by retailers who sell mobile homes.
In order to qualify, you need to put down 10% of purchase price for 10-30 year loans. The interest rate will be 2-3% higher than mortgages, fixed or variable. But you can qualify with higher debt ratio and use the loan funds to cover home plus lot improvements (walkways, garages etc). For improvements on an already owned mobile home, you can go for the Title I loan, but the limit should be within $7500 to be treated as personal property loan.
How to qualify for mobile home mortgagesYou are eligible if the conditions given below are fulfilled.
Foundation requirements:
Mobiles homes built prior to 1976 hardly qualify for mortgage because lenders are concerned over the life expectancy and quick depreciation of such a home compared to that of traditional site-built houses.
The manufactured home must follow the building standards proposed by HUD under the Federal National Manufactured Housing Construction and Safety Standards Act of 1974. - The HUD code requirements are as follows:
- The houses must be built as one, two or three section homes in a protected building center and then transported on a frame to be installed on the site. The wheels and axles must be removed and the mobile home should be fixed to the ground to give it a permanent foundation. As per HCD rules, you need to record form 433(A) which implies that the home is changed from personal to real property due to it's permanent foundation.
- The homes should comply with the HUD code restrictions for construction, design, durability and strength, fire resistance, energy efficiency, transportability and quality.
- The property should maintain high standards for heating, plumbing, air conditioning, thermal and thermal systems.
- The property must pass through strict inspections conducted by third party.
- Ownership Rights:
The borrower must have absolute ownership (free of liens) rights except if the loan is required for a lot which consists of a share in a co-operative association owning and operating the mobile home park.
- Purpose of the loan:
- The loan must be taken in order to purchase or refinance only a manufactured home with the lot/land being owned by the borrower, the home and the lot on which it is situated, only the lot on which the mobile home (already owned by the borrower) will be installed.
- The home must be the principal residence of the borrower.
- For a lot loan, the mobile home must be placed on the lot and must be the principal residence within 6 months after the date of the loan.
- If the loan is meant for a home in a mobile home park, then the lease on the home should extend for at least 5 years beyond the loan term.
- Credit Score:
Borrowers must have a minimum credit score of 620 in order to get an affordable rate of interest. However, you may get manufactured home loans in spite of having poor score but you'll be charged higher interest rates. So, you can try for loans that are not score driven but even such loans require you to have a moderate credit score of 550 and above.
- Down payment:
Lenders expect you to put down 5-10% of the purchase price for newly built homes for a loan term of 15 to 30 years depending upon your credit profile, size of the home and type of loan. For a pre-owned home, the down payment is the same but loans are available for 20 years depending upon the factors stated above.
Types of mobile home mortgage loans- Federal programs: FHA approved lenders offer Title I loans for purchase and refinance of manufactured homes for a loan term of 20-25 years at a fixed rate of interest. They also offer Title II mortgage loans on manufactured homes. The maximum loan limit for homes located on land you own is $175,000.
Besides, the VA guarantees manufactured home loans for veterans; however the loans are offered by VA approved private lenders. With such a loan, you can borrow up to 95% of the purchase price. There is also the USDA Rural Development offering 30 year manufactured home loans for home purchase and repair.
The programs stated above are specially meant for first time buyers who can put down little cash and look for lower rates of interest.
- State programs: State Housing Finance Authorities/Housing Agencies offer mobile home loans to first time buyers at rates comparatively lower than that offered by private lenders. For instance, lenders approved by the Maine Housing Authority offer the First Home Program to first time buyers of mobile homes. Then there is also the first time buyer mobile home loan program offered by the Connecticut State Housing Finance Authority.
- Conventional Loans: Such mortgages are offered by private lenders, banks, etc with conforming as well as jumbo loan packages ranging from 15-30 year Fixed Rate loans, 3-2-1 Buy down loans, to 6 month-1 year ARMs, and Hybrid ARMs (3/1, 5/1 and 7/1 year loans). There are amortized as well as interest-only options available. Know more about popular loan programs.
- Bad Credit Mobile home loans: These are sub-prime loans offered to those having "B", "C" or "D" credit due to late payments/loan defaults/bankruptcy or foreclosure in the past. Bad credit mobile home loans can be FRMs as well as ARMs but the interest rates and costs associated with such loans are usually high. So, if you cannot afford higher payments, wait till you repair your credit by using the Credit Repair tool.
Alternatively, you can request for no-obligation free mortgage quotes with a few lenders who’ll first work with you in improving your credit and then provide you with loans. Lenders often provide a free service in helping a borrower repair his credit. So, you may not even have to pay for the credit repair.
- Low down payment mobile home loans: Low down payment loans on mobile homes will require you to pay private mortgage insurance which protects the lender in case you fail to pay down the loan. Whether you'll get a low down payment loan will depend upon 3 things:
- The lender's policies for down payment
- Your ability to make mobile home mortgage payments
- Your creditworthiness as evident from your credit report
However, a gift from family or friends can help you make the down payment.
- No income/No asset verification loans: If you're self-employed and unable to verify your income and assets, then this is right choice for you. Here again the interest rate and costs are higher on account of higher credit risk involved with this loan. These are also known as NINA loans.
- Construction loans: You can apply for construction mortgages to build your mobile home and also make improvements on the land. These loans are available at fixed as well as adjustable rates during the construction period after which the loan is converted into a permanent mortgage.
- Mobile home land loans: You may wish to purchase land and then set up the mobile home or you may be willing to purchase a lot in a mobile home park. For such purpose, make use of land loans.
- Home improvement loans: Such loans help in financing mobile home improvements. The Title I Home Improvement loan insured by FHA is an example.
Apart from the options stated above, there are mobile home refinance and equity loans available with specific lenders. All you need to do is, understand your purpose of taking the loan and then choose the right one depending upon your affordability. What about the tax benefits?Whether the manufactured home loan is a mortgage or not, the interest on it is deductible provided it is used to secure your principal residence.
If you have a mobile home mortgage and itemize your taxes, you can deduct the interest and property taxes on your Federal income tax return. You can also deduct the interest on a loan for mobile home in a rented lot. But the rent payments are not deductible until you have a 15 year or longer lease with a lot purchase option.
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RDTravis@direcway.com
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Post subject: mobile home refinancing |
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| I want to refinance my mobile home loan to do improvements. I need a loan that does not require a permanent foundation. |
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Caron
Moderator
Joined: 19 Jul 2005
Posts: 1562
Location: florida
266.68 Dollars($)
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Post subject: RE: |
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Hi RD Travis
Welcome to MortgageFit forum.
There are mortgage loans that are offered against mobile homes having no permanent foundation. You can apply for mobile home refinance home equity loans that will help you to conduct home improvements apart from refinancing your mobile home. Moreover, the interest charged on such loans is tax-deductible, so it will reduce the actual amount of taxes to be paid.
Most lenders do not approve conforming loans for mobile homes without permanent foundation. You can therefore apply for non-conforming loans or jumbo loans that have higher limits than that offered by the government sponsored agencies - Freddie Mac and Fannie Mae. These however charge slightly higher interest rates since there is greater risk involved in the process.
Apart from these, there are the VA loans that are offered against such mobile homes but you should be a qualified veteran to avail such a loan.
Moreover, the terms and conditions of home equity loans, VA loans as well as jumbo loans may vary from state to state. So if you let us know the name of the state where you are residing, it will be easier for us to provide you with some more information in this matter.
Hope you have benefited from this information.
Please feel free to post further queries. Also, sign up with us to avail free advice on related issues.
Regards,
Caron. |
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Telleta
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Post subject: Criteria for Mobile home refinance |
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| Can i have a exact criteria which i need to look at while going for a mobile home refinance. |
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Caron
Moderator
Joined: 19 Jul 2005
Posts: 1562
Location: florida
266.68 Dollars($)
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Post subject: RE: Eligibility criteria for mobile home refinance loan |
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Hi Telleta
Welcome to MortgageFit forum.
In order to avail a mobile home refinance loan, you need to qualify as a borrower and your mobile home should also qualify for the refinance. To qualify as a borrower, you should satisfy the following criteria.
- A minimum credit score of 620.
- Your credit history as well as employment history should be impressive.
- You must not have filed bankruptcy since the past 5 years.
- You should have made 3 months payments on the existing loan.
- You must have 2 consecutive years of tax filings in case you are self-employed.
Your mobile home should also fulfill some criteria for the mobile home refinance loan.
- The mobile home cannot be older than 1977.
- It should be built according to HUD standards.
- The loan amount should not be less than $20,000,00.
- Your mobile home should have been built in 1990 or after, in case you want a cash-out refinance loan.
- The home can be situated in a park on a leased land.
- The size of the home should be about 768 square feet.
Apart from these criteria, there can be some others which vary from one lender to another. I would advice that you consult a suitable lender, provided you have already satisfied the above criteria. Also, refer to our section on Refinance before you apply for a loan against your mobile home.
Please feel free to send us your feedback.
Regards,
Caron. |
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Tina
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Post subject: Qualifying for loan |
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| My credit score is 785. My husbands is 660. We have an income of 50,000 per yr. Our employment length at both our jobs is 9.5 yrs. approx. we have a home mortgage now that we intend to turn into rental property. We own a 1.5 acre piece of land with all the utilities newly put on. Land is free and clear. We want to buy a 2280 square ft. doublewide. Is this possible? Never late on house payments in 10 yrs. by the way. |
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Niicss
Joined: 03 Oct 2005
Posts: 2986
Location: New Jersey
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Post subject: RE |
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Cool Tina, To me your credit score looks good and the best part is you have never late on house payments in 10yrs.
I think you can get a loan with ease, all you need to do is go to any lender and surely you will get a loan with resonable interest rate.
Chill
Niicss |
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Samantha
Community Mentor
Joined: 16 Sep 2005
Posts: 1606
Location: MASSACHUSETTS
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Post subject: RE: |
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Hi Tina
It feels great to hear that you and your husband have good credit scores. I also find that your employment history is appreciable. As Niicss has mentioned, with such good scores and income level you will definitely get mortgage loans for any kind of home that you wish to purchase.
Regarding your home mortgage, you can turn it into rental property but your mortgage note should state that option. Depending on your income and other expenses, you can make monthly payments on the home mortgage and also pay for another mortgage in case you take a second loan to buy the other property.
In case you think of reducing your monthly payments on the home mortgage consider refinancing that loan, but check out if you can get a lower rate. Otherwise you will not benefit from refinancing. Moreover refinance your loan when you are still living in the present home. This is because it costs more to refinance in case of an investment property rather than a primary residence.
Hope you will benefited from the information.
Best wishes for your new home. May God help you.
Thanks,
Samantha. |
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leslie clark
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Post subject: refinance home |
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| my credit is damaged i need a loan quickly before forcloser |
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Samantha
Community Mentor
Joined: 16 Sep 2005
Posts: 1606
Location: MASSACHUSETTS
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Post subject: |
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Hi Leslie,
Welcome to MortgageFit Forums.
Don't get disheartened even if your credit has been damaged severely. There are alternative options to get a loan and you will certainly be able to save a foreclosure.
Just try to check that your credit doesn't fall back more. We do have a good network of lenders who can help you to overcome this situation. One of them will contact you, analyze your problems and suggest you the best option which you can afford.
God bless you.
Thanks,
Samantha |
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Nana
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Post subject: Own my mobile home |
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| I currently own my 1997 single-wide mobile home. The home sits on a family owned piece of property--which I DO NOT own. I am needing a loan to pay off some of my high intrest loans. Is there something out there for me? My credit is POOR. Please HELP! |
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Samantha
Community Mentor
Joined: 16 Sep 2005
Posts: 1606
Location: MASSACHUSETTS
150.38 Dollars($)
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Post subject: |
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Hi Nana,
Welcome to MortgageFit Forums.
I understand your problem. It is difficult to get a loan at convenient rate with poor credit. Lenders often ask for high interest rates on the loans with poor credit records.
But, don't lose hope. There are different kinds of loans available to fit your situation. Only thing, you have to check which one is convenient to you. Also, I would suggest you as a friend, to try and improve your credit gradually as that can sort out your loan problem considerably.
We do have a wide range of lenders who are sincere and efficient to help people in difficult situations as yours. Kindly sign up with us at free of cost. We shall forward your query to an appropriate lender who will call and discuss with you to suggest the best possible way out.
Feel free to ask if you have further doubts.
God bless you.
For MortgageFit,
Samantha |
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Nurse girl
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Post subject: Refinance |
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| My husband and I went through a bankruptcy filed last year, discharged in February /05. We make $70,000 plus a year and our credit scores are only around 450 right now. When we bought our home, we paid about 8% down, but we bought our 10 acres to put it on, drilled a well and have done a lot of improvements including a pool, horse paddock and dog kennel. Homes of less quality with less extras are selling in the neighborhood of $110,000. We reaffirmed our debt and owe approx. $76,000. We would like to refinance with a $20,000 cash out or get a home equity loan for $20,000 to pay for a needed surgery. I have been at my job for 3 years and in the same line of work for 12 years. We currently have an adjustable rate mortgage currently around 10% interest and a 30 year note. We'd like to possibly get a better rate and a shorter loan term but aren't sure if this is possible after bankruptcy. Does it matter that we reaffirmed our debt. We have been 30 days late or less several times over the life of the loan but are current on our payments. |
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Niicss
Joined: 03 Oct 2005
Posts: 2986
Location: New Jersey
469.48 Dollars($)
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Post subject: RE |
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Hi, can i ask that which bankruptcy did you filed. Is it under chapter 7 or charter 13.
Niicss |
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adonis
Joined: 22 Oct 2005
Posts: 4417
Location: ALASKA
208.06 Dollars($)
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Post subject: RE |
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Getting a loan thats too with favourable rate is tough after bankruptcy. You have also mentioned that you have been late few times in making your loan payment, again that will going to effect the your credibility when you will go for a loan.
There are many lenders in the industry who offer loans to the borrower with poor credit. Chances of getting a loan with fair rate looks tough but not impossible.
All the best |
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