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?
- What are the requirements to qualify for mobile home mortgages?
- What are the steps that you need to follow to obtain mobile home financing?
- What tax benefits do mobile home loans offer?
- Top 20 Mobile home loan FAQs
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.
- 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.
- 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.
- 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.
On the basis of land ownership:
On the basis of lending authority:
On the basis of other factors:
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 -
- 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.
- 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. - 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.
- 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:
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.
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.
Related Readings
- Can mobile home be used as collateral to get personal loan?
- Mobile Home Reverse Mortgage for seniors
Related References:
if i currently own a mobile home that is on rental property and want to purchase a home, would i qualify as a first time home buyer?
Hi lc and clw,
If you already own a mobile home and use it as your principal residence, you cannot qualify as a first time home buyer. To qualify, you must not have owned a principal residence for the past 3 years.
If you already own a mobile home and use it as your principal residence, you cannot qualify as a first time home buyer. To qualify, you must not have owned a principal residence for the past 3 years.
I have a credit score of 600. I can not find a lender to even consider giving me a loan. Can anyone point me in the direction of a finance company that might give me a loan. I have someone who will co-sign and I can put up to 20% down. I cant even find a company that accepts a co-signer.
Hi Chris ,
A credit score of minimum 620 is required to qualify for a loan. With a 600 credit score, it will be difficult for you to get a loan in the present circumstances. Is your credit score the only reason why the lenders have rejected your loan applications? Does the manufactured home comply with the HUD-specified standards and is it based on a fixed foundation? Do you have any other debts? What is your DTI ratio?
Thanks,
Jerry
A credit score of minimum 620 is required to qualify for a loan. With a 600 credit score, it will be difficult for you to get a loan in the present circumstances. Is your credit score the only reason why the lenders have rejected your loan applications? Does the manufactured home comply with the HUD-specified standards and is it based on a fixed foundation? Do you have any other debts? What is your DTI ratio?
Thanks,
Jerry
I have 48 acres and fixed 2 yr old doublewide on perm. foundation, good credit for me excellent for my husband. I have vanderbilt mtg. Does anyone have any recommendations on who I can go to refiance this mortgage as my apr is almost 9%.
Does anyone know a bank that will even finance modular homes? I am looking at 2 modulars that they consider "steel beam" and no bank will finance them
someacrege, i may know of a program. that it's permanently affixed to a foundation is a plus, and i assume that you actually own the 48 acres. the only other major caveat is that vinyl skirting is not allowed.
rates are probably 2 to 2.5 per cent lower than that 9% you have.
rates are probably 2 to 2.5 per cent lower than that 9% you have.
what is the latest you loan money on and do you loan on homes only?
Can you get a loan if your median score is only 555?
Welcome,
To Wally,
This is a mortgage community and there are lenders participating here who can help you in getting a loan. You can seek a no obligation free mortgage consultation from them. It will let you know whether you would get a loan or not.
To KK,
With a median score of 555 it would not be possible for you to get a loan. You should note that conventional loans are available at a credit score of 700-720 whereas FHA loans are available at a credit score of 620. You'll have to improve your credit score first and then look out for loans. Check out the given page to know more about improving your credit score:
http://www.mortgagefit.com/credit-rating/credit-repair.html
To Wally,
This is a mortgage community and there are lenders participating here who can help you in getting a loan. You can seek a no obligation free mortgage consultation from them. It will let you know whether you would get a loan or not.
To KK,
With a median score of 555 it would not be possible for you to get a loan. You should note that conventional loans are available at a credit score of 700-720 whereas FHA loans are available at a credit score of 620. You'll have to improve your credit score first and then look out for loans. Check out the given page to know more about improving your credit score:
http://www.mortgagefit.com/credit-rating/credit-repair.html
I am currently leasing out my manufactured home, but the lessee would like a lease purchase with the option to buy. How do I go about this?
can i refi a mobile home even if it's my 2nd home
hi, I am currently looking into the possibilties of a mobile home. I have a good credit score in the 700s but my fiance has a score of 580s we have been trying to get a mortgage but have not been successful because my debt to income ratio is to high to do it alone and his crdeit isnt good enough do you think there is anything I can do?
hi dkr,
you can go for the lease purchase agreement. you will need to consult a real estate attorney and get an agreement drafted by him. before you enter into the agreement, check your lessee's credit report and payment history.
hi anonymous,
you can definitely refinance your mobile home, even though it is your second home, provided there is enough equity in the property. but the interest rate you will get on refinance may be higher than that on a primary residence refinance.
hi chrissy,
this issue has been discussed on the following page:
http://www.mortgagefit.com/mobilehomeloan/high-dtiratio.html#95674
you can go for the lease purchase agreement. you will need to consult a real estate attorney and get an agreement drafted by him. before you enter into the agreement, check your lessee's credit report and payment history.
hi anonymous,
you can definitely refinance your mobile home, even though it is your second home, provided there is enough equity in the property. but the interest rate you will get on refinance may be higher than that on a primary residence refinance.
hi chrissy,
this issue has been discussed on the following page:
http://www.mortgagefit.com/mobilehomeloan/high-dtiratio.html#95674
gmarkely, I have a permanent foundation with no vinyl siding. Its blocked in.? Do you know where I could go to refi?
Vanderbuilt mt.g and I do own the 48 acres that the home is on.
Vanderbuilt mt.g and I do own the 48 acres that the home is on.