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Mobile home loan – A less costly option to buy homes

Posted on: 28th Jun, 2005 04:53 am
If you're looking for a relatively less costly housing option than a traditional home, then one good choice available before you is the mobile or manufactured home. Mobile home, also called as trailer or caravan, is gradually becoming a popular housing option to many home buyers. Though a mobile home may look like a traditional home but it is comparatively little difficult to finance this type of home than to finance a traditional one. With little more effort, however, you can find out the required financing option too. If you want to know about mobile home loans, check out the following topics:

What are the types of mobile home loans?

Finding out the right mobile loan product can save a lot of money for you. Here is an outline of different financing options that may help you select the right product. These loan products are categorized on the basis of land ownership, lending authority and some other factors.

    On the basis of land ownership:


  • Personal property loan: If the manufactured property is not on a permanent foundation and if it is purchased separately, then you have to take out a personal property loan. When you own a land on your own, then personal property loans may be required to finance the purchase of a mobile home. In comparison to traditional home financing, the qualifying standards for personal property loans are relatively lenient.

  • Mobile home mortgage loan: If the manufactured property that you want to purchase is on a permanent foundation, then you have to take out a mobile home mortgage loan. These loans are relatively difficult to qualify than the personal property loans. These loans also require higher upfront costs than the personal property loans.

  • On the basis of lending authority:


  • Federal programs: Title I and Title II loans are offered by the lenders approved by the Federal Housing Administration (FHA), to buy mobile homes. To qualify for these FHA-approved loans, mobile homes must conform to the HUD Code and must be located on approved foundations.

    Manufactured home loans, guaranteed by the Department of Veteran's Affairs (VA), are available for for the veterans. This 100% VA financing is available if the mobile homes are located on approved foundations. The United States Department of Agriculture (USDA) also offers financing for the purchase of manufactured homes.

  • State and local housing agency programs: Mobile home loans are offered by the State Housing Finance Authorities/Housing Agencies to the first time home buyers at relatively lower rates.

  • On the basis of other factors:


  • Construction loans: These are short term loans designed to help you build a mobile home on property you have already purchased. Short term, high interest construction loans may also be available to help you make improvements on your home or property.

  • Home improvement loans: This type of loan is designed to help you make improvements to your mobile home. An example of this type of loan is a Title 1 Home Improvement loan insured by the FHA. Some states offer special loan programs in addition to the Federal government's tax deduction for certain energy efficient improvements.
  • In addition to the options stated above, there are also mobile home refinance and equity loans available from specific lenders. All you need to do is decide why you want to take out the loan and choose the one that is right for you.

What are the requirements to qualify for mobile home mortgages?

Usually mortgage loans are not offered for the purchase of manufactured homes which were built before 1976. This is so because the lenders take a close look at the condition of the house before offering a loan. A manufactured home must comply with the building standards proposed by Department of Housing and Urban Development (HUD). Here are the requirements to qualify for a manufactured home loan -

  1. The HUD Code requirements:
    • As per the HUD Code, the home must be built as 1/2/3 section homes at a protected place. Then the home has to be shifted to the site. Thereafter, the wheels and axles must be removed so as to give it a permanent foundation.
    • The home should follow the HUD Code pertaining to quality, design, transportability, durability, energy efficiency and fire resistance.
    • The manufactured home should pass the third party property inspections.
  2. Credit score:
    Mobile home lenders require a minimum credit score of 680 to offer a mobile home loan. With a credit score higher than that, you can get better rate.

  3. Ownership rights:
    • The mobile property that you are purchasing should be clear of any liens. The property under consideration may also be managed by a co-operative association.
  4. Down payment:
    • Depending upon several factors such as the type of loan, value of the home and your credit standing, you may be required to make down payment of 5-10% of the purchase price of the home.

What are the steps that you need to follow to obtain mobile home financing?

If you are planning to buy a mobile home, you need to follow some steps. Some of these steps are same as followed in the general home buying process, whereas some of the steps differ. Here are the steps that you need to follow:


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What tax benefits do mobile home loans offer?

If the loan is a mortgage, secured by the mobile home that is your primary residence, then the Federal government will allow you to deduct the interest and property taxes you pay from your income taxes, provided you have purchased the home before September of the tax year. In addition, some states allow you to deduct your property taxes from your state income taxes, provided the Federal timing requirement has been met.

Some states, like Indiana, may permit you to deduct all or part of the rent you pay for the lot your mobile home rests on. In order to determine whether your state will permit you to deduct the lot rent, you should consult a tax professional in your state.

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Like Leslie that wrote in Oct, 2005. I am facing forclosure, I have a wife and 2 children that I am seriously afraid of being out on the streets. I dont know what to do. My credit really is not good at all. I need help and help fast. Any help that can be sent my way would be awesome. -Henr
Posted on: 19th Apr, 2009 07:10 pm
I have been going crazy trying to find a loan for a mobile home. I can't find a lender that will finance a mobile home. Where do I start?
Posted on: 20th Apr, 2009 09:56 am
Posted on: 21st Apr, 2009 05:07 am
My husband and I both have a credit score of 650 or so. The only thing bad on our credit is some medical bills. We have recently paid off 6 small collection accts that appeared on the credit reports and are paying on the other ones. This will be our first home purchase and we are not sure where we stand. Any help?
Posted on: 21st Apr, 2009 11:25 am
i bought a mobile home from clayton homes vanderbilt mortage is the lender this is my story. i bought my land first i owed 33,000 on the land when i went for the home. i did not want them to add the land into the home loan but they did. they did not offer me a first time home buyer anything, they said i could not get my own insurance. i have only had the home for almost 2 years my mortgage was only suppose to be 1136 a month when i went to the closing i was told i could not get my own insurance which made my payment go up to 1374 a month after a year the insurance went up and now i am paying 1406 a month which i cannot afford i have lost 10% of my pay and i have lost my child suuport i have to pay seperate taxes on the land and the home. i called when the president announced the home remodafication program and was told that they were not particapating because there was nothing in it for them. all i was asking was for my interest rate to be lowered i am paying 9% which they told me at the time of purchase could not be negociated my credit score at the time i bought the house was a 704. i have to refinance or i am going to lose my house and land. but credit has suffered severly because of my house payments my payments are 85% of income. please help.
Posted on: 25th Apr, 2009 10:24 am
I am a 1st time home-buyer with very "new" credit.I have only owned 2 credit cards and have made payments on time every month,paid in full for the past 2 1/2 years. I have no other loans,debts,or credit anywhere. I have a full-time job and a part time job,neither of which pay very well. However,I do have a decent amount of money saved in order to put down as a down payment,pay closing costs,etc. What are the chances I can get a loan to finance a mortgage on a mobile home?
Posted on: 25th Apr, 2009 11:07 am
Hi I bought my 1992 Double wide in Sept 08 and recieved a settlement and paid it off in febuary 09. My credit score is 570 and I keep repairing it as there is some things on there that shouldnt be like medical, I am on SSI and a Student and I need to do some home repairs and need to get a loan for it do you have any suggestions.
Thanks,
Sue
Posted on: 26th Apr, 2009 07:34 pm
I'm looking to purchase a perm foundation manuf. home with 3 ac. but it was built in '99. The seller has dropped it to $68,000 which is payoff for current note. He said it was appraised at $78,000. My credit score is 710. I'm under the impression that a lender will not accept this type being it's more than 5 yrs old. Is this true? If not, will there be more required down or high apr? Is there a limitation of how old they will accept?
Posted on: 28th Apr, 2009 07:57 am
i would like to get a loan to purchase a 2004, single wide mobile home. we rent a home now and pay 1,000 month in rent. too big now for my husband and i and would like something smaller. can you help? our credit is ok can you help us.
Posted on: 28th Apr, 2009 12:03 pm
Hi anonymous,

A credit score of 650 is not very impressive, but is not bad at all. You are doing the right thing in paying off your collections. You should remove the negative items from your credit as early as possible. This will increase your credit score. Try and improve the credit and take it to 700+. Also, save some money for downpayment. Then, go for a loan. With a 700+ score and some downpayment, you will get good loan offers at attractive rates.

Hi rosey,

Since your lender is not going to do any modification on your loan, a refinance seems to be the solution to keep the land and the home. If your credit is not good, no lender would want to refinance your loan. You should work on improving your credit as quickly as possible. What is you current credit score like?

Hi Angela,

Your credit looks good with no negative items listed on it. As you have limited debts, your DTI ratio should also be good. You have a full time job and a considerable amount money to put down. You seem to have a good chance of qualifying for a mobile home loan. What is your credit score? Are you looking for an particular type of loan like a Govt-backed FHA loan?

Hi suej,

I think The FHA-insured Title I loan could be the loan that you are looking for. You cna use this to carry out the repair work on your home. You can call (800) 767-7468 and request item number 2571 for further details regarding this program. In the mean time, try and improve your credit as quickly as possible.
Posted on: 30th Apr, 2009 03:27 am
really a nice article.it is really appreciable.
Posted on: 30th Apr, 2009 05:54 am
swell post, bestmortgages
Posted on: 30th Apr, 2009 06:22 am
ben, the age of the home you mentioned is going to be acceptable for lenders you might seek financing from.
Posted on: 30th Apr, 2009 06:23 am
Hi peanut,

FHA insured Title I loans are quite useful in purchasing a mobile home. They come with low interest rate and low downpayment. But to qualify for an FHA loan you need a crdit score of 620. You have mentioned that your credit score is ok. But can you tell us what exactly the score is?

Hi Ben,

With the mobile home having a permanent foundation and you having a decent credit score of 720, the chances of you quallifying for a mobile home loan are considerable. Being more than 5 years old does not disqualify a mobile home for a loan. As long as the home is not a pre-1976 model, it can qualify for a home loan.

Thanks,

Jerry
Posted on: 30th Apr, 2009 06:48 am
If I purchased a mobile home and on a rental lot and the wheels are still attached and I plan to purchase a site built home, would I qualify as a first time home owner?
Posted on: 30th Apr, 2009 03:11 pm
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