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:
I'm interested in selling my single wide mobile home that is on a piece of property in Louisiana and buying another home. My banker told me to research any loan programs that would be beneficial to a first time home buyer maybe interested in buying my mobile home, but who doesn't have the cash on hand to meet the 20% down payment. I'd really like to sell soon and am afraid that I will not be able to if buyers can't find the right loans to buy the property. Any suggestions?
i own a 1998 16x80 mobile home that is paid for on a piece of land which I owe 12000. I want to put in a basement and make single wide into a dble wide. I have someone who could do it at 35000. Do you know who I would contact to get this kind of loan.
Hi Allison,
I believe the best loan program for a first time home buyer willing to buy a mobile home is the FHA Title I loan. One of the advantages of the FHA loan is that as a borrower you're not required to put down 20% as down payment. You can make the purchase with a down payment as little as 3.5%. This feature is a good attraction to many a first time buyers as most of them don't have a huge amount of money to use as down payment.
Hi dreamingjeannie,
The FHA insured 203k loan could be the one that you're looking for. It allows the rehabilitation of your home, provided it is at least 1 year old and the cost of the rehabilitation is more than $5000. What's your credit? If it's more than 620, you should contact a local lender and apply for the 203k loan.
Thanks,
Jerry
I believe the best loan program for a first time home buyer willing to buy a mobile home is the FHA Title I loan. One of the advantages of the FHA loan is that as a borrower you're not required to put down 20% as down payment. You can make the purchase with a down payment as little as 3.5%. This feature is a good attraction to many a first time buyers as most of them don't have a huge amount of money to use as down payment.
Hi dreamingjeannie,
The FHA insured 203k loan could be the one that you're looking for. It allows the rehabilitation of your home, provided it is at least 1 year old and the cost of the rehabilitation is more than $5000. What's your credit? If it's more than 620, you should contact a local lender and apply for the 203k loan.
Thanks,
Jerry
I have decided to sell my 1975 mobile home, on a permanent foundation and in good shape on a 2 acree piece of nice property. I was told by one prospective buyer that the age of the home makes it unmortgagable. Is this true?
Hi
Getting mortgages for mobile homes built before 1976 is near impossible as the lenders are often concerned about the life expectancy of these old homes. These homes do not even meet the safety requirements as described by the Federal National Manufactured Housing Construction and Safety Standards Act, passed in 1974. There may still be some lenders who might finance such old homes. But finding such a lender will no doubt be a difficult task.
Getting mortgages for mobile homes built before 1976 is near impossible as the lenders are often concerned about the life expectancy of these old homes. These homes do not even meet the safety requirements as described by the Federal National Manufactured Housing Construction and Safety Standards Act, passed in 1974. There may still be some lenders who might finance such old homes. But finding such a lender will no doubt be a difficult task.
I AM LOOKING TO GET A LOAN, AND USING THE TITLE OF MY MOBILE HOME AS CALERTAL.
our offer was accepted for a purchase of a 2005 manufactured home. I just found out, although we have the funds available and great credit, my husband needs to provide pay stubs in order to close. Do all lenders go through fannie mae for manufactured homes which require this? Are there any lenders in Washington that does not sell this off to fannie mae?
Hi
To Kathy,
If you own the title to the mobile home free and clear, you can use it as collateral and obtain a loan on it. However, you need to provide a little more information so I can give you any suggestion. What is your credit score? Do you have any negatives on your credit? How much of down payment can you afford?
To Anna,
All the lenders do not sell their loans to Fannie Mae. There are lenders who dont sell their homes to Fannie Mae or Freddie Mac and hence they arent bound to follow their underwriting guidelines. FHA loans are also not owned by Fannie Mae. But most of the lenders, no matter whether they sell their loans to Fannie Mae, would want you to produce last 2-3 months pay stubs as a proof of your income, in order to qualify.
To Kathy,
If you own the title to the mobile home free and clear, you can use it as collateral and obtain a loan on it. However, you need to provide a little more information so I can give you any suggestion. What is your credit score? Do you have any negatives on your credit? How much of down payment can you afford?
To Anna,
All the lenders do not sell their loans to Fannie Mae. There are lenders who dont sell their homes to Fannie Mae or Freddie Mac and hence they arent bound to follow their underwriting guidelines. FHA loans are also not owned by Fannie Mae. But most of the lenders, no matter whether they sell their loans to Fannie Mae, would want you to produce last 2-3 months pay stubs as a proof of your income, in order to qualify.
I purchased a 2004 Palm Harbor Manufactured home brand new in 2004. I pay space rent as well. I have a monthly Mortgage with US BANK. I am headed financialy in a whirlwind and have been tryiny to sell on and off for 3 years. If I leave the home and give it back to the bank what will happen? Or will it be a forclosure? I am really scared and confused, but I can no longer keep the home and even if the payments were lowered that would not change my circumstance.
Due to the Economy I was looking into purchasing a property in a park to live in for a long time with my family. I have a bankruptcy already, but am 28 and have stable (4 yrs), advancing employment. The house I am looking to purchase is $20,000. What are the steps I need to follow, and the type of loans I could possibly qualify for? I can come up with up to 10% down ($2000). Any help would be greatly appreciated! Thanks~
My husband and I have a contract on our current home and land and are wanting to purchase a used mobile home to be placed on 5 acres that we own elsewhere. My question is, in looking for anything decent it is going to run us between $18,000 to $22,000 to purchase. We would be able to put down up to $9000 and would need to finance the remainder. How should we go about the financing the remainder. We do not want to finance anthing for more than 60 months. Our credit is probably not good due to we did had to file bankruptcy 13 months ago.
Our home is on a permanent foundation and we would like to find a way to sell this house. It is a 1974 what are our options?
My nephew (18 yrs) is looking at a 2003 1000 sq ft. mobil (clean) in a trailer park on a rented lot. The asking price is $30,000. He has $20,000 in the bank. He has talked with his credit union and they wont loan on a mobil without land. The will also not loan to my nephew and his wife because they havent been at their jobs for very long (they have been working for several months each). The mobil is nice, The park in nice, the price is nice, the down is nice, who can they find to loan them the remainder.
Hi
To clh,
A down payment of 10% is fine. But youve mentioned that you have a bankruptcy in your credit report. How old is the bankruptcy? Was it a chapter 7 or 13? What is your credit score? You need to have a credit score of 600+ to be able to get a loan in current economy.
To yeahright,
" Our credit is probably not good due to we did had to file bankruptcy 13 months ago"
Have you checked your credit report? What is your credit score? You should have a decent credit score to qualify for a loan. The amount of down payment youre ready to put in is good. But if you do not have a good credit score, it be difficult for you to get approved for a loan.
To J Robinson,
Selling a 1974 mobile home is difficult as you hardly find any lender willing to finance a mobile home that is older than 1976. These homes do not conform to the safety standards, have a low life expectancy and depreciate fast. This is the reason why lenders do not want to finance such old mobile homes.
To S. Smith,
If your nephew does not have a stable employment history, it be difficult for him to qualify for a mobile home in this market. Moreover, he needs to have a very good credit score to qualify. Since the listed price of the home is $30,000 and he got $20,000 in his bank account, I think he can go for a personal loan. Have you thought about this option? Youl have to bear a high interest rate, but this might be good option for him, in case he fails to qualify for a mobile home loan.
To clh,
A down payment of 10% is fine. But youve mentioned that you have a bankruptcy in your credit report. How old is the bankruptcy? Was it a chapter 7 or 13? What is your credit score? You need to have a credit score of 600+ to be able to get a loan in current economy.
To yeahright,
" Our credit is probably not good due to we did had to file bankruptcy 13 months ago"
Have you checked your credit report? What is your credit score? You should have a decent credit score to qualify for a loan. The amount of down payment youre ready to put in is good. But if you do not have a good credit score, it be difficult for you to get approved for a loan.
To J Robinson,
Selling a 1974 mobile home is difficult as you hardly find any lender willing to finance a mobile home that is older than 1976. These homes do not conform to the safety standards, have a low life expectancy and depreciate fast. This is the reason why lenders do not want to finance such old mobile homes.
To S. Smith,
If your nephew does not have a stable employment history, it be difficult for him to qualify for a mobile home in this market. Moreover, he needs to have a very good credit score to qualify. Since the listed price of the home is $30,000 and he got $20,000 in his bank account, I think he can go for a personal loan. Have you thought about this option? Youl have to bear a high interest rate, but this might be good option for him, in case he fails to qualify for a mobile home loan.
can you help me get a mortgage for a mobile home