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:
We're in the market for buying a home. After looking for 4 years, we have finally found one within our price range that offers us exactly what we need.
It is a 1989 doublewide in PRISTINE condition (NOTHING wrong with it at all. not cosmetically or anything), fixed over a permanent foundation (full walk out basement). It has several decks, a screened in porch, patio, etc. It's beautiful! It sits on a level acre, off of a main road, yet private. Also sitting on the property is a Trans Steel 30x60 garage with power, heat and a full bathroom. We own a small business, so it is PERFECT for our living space and work space.
Only one huge problem. We cannot find someone who will finance it as a mortgage loan. Those willing to finance as a personal property loan have insane down payment requirements (20%!) and interest rates, with the balloon payment due.I have called every bank and mortgage company I can think of. Local and National. We've looked into the government programs, and nothing.
Is there anything at all we could do for a bank or mortgage company to look at the property's actual worth, and not just go by what a paper says? I can't stress enough how perfect this place is for us.
Please help us!
Thanks in advance!
It is a 1989 doublewide in PRISTINE condition (NOTHING wrong with it at all. not cosmetically or anything), fixed over a permanent foundation (full walk out basement). It has several decks, a screened in porch, patio, etc. It's beautiful! It sits on a level acre, off of a main road, yet private. Also sitting on the property is a Trans Steel 30x60 garage with power, heat and a full bathroom. We own a small business, so it is PERFECT for our living space and work space.
Only one huge problem. We cannot find someone who will finance it as a mortgage loan. Those willing to finance as a personal property loan have insane down payment requirements (20%!) and interest rates, with the balloon payment due.I have called every bank and mortgage company I can think of. Local and National. We've looked into the government programs, and nothing.
Is there anything at all we could do for a bank or mortgage company to look at the property's actual worth, and not just go by what a paper says? I can't stress enough how perfect this place is for us.
Please help us!
Thanks in advance!
can my wife and i get a mortgage big enough to buy and consolidate too.
I want to refi my manufactured home that I am using as a rental property, but no takers. Any advice?
i am looking at buying a manufactured home and i want to get an fha loan. the bank told me i might not be approved because the house is a manufactured home? can you get an fha loan if the house is a manufactured one?
It is extremely disappointing, depressing & disillusioning to see lenders continue to live in the distant past re: manufactured homes. When are "they" going to come out of the financial Dark Ages and recognize the legitimacy of alternative housing (other than site-built housing)?
The exorbitant interest rates charged is just short of usury, by comparison to "conventional housing." My wife and I have found an excellent 2,100 s.f. manufactured - custom built - on owned land. When searching for lenders to finance 40% of the purchase price, one feels like a leper.
The best I've found is a local lender who will write the loan at 7.75% for 15 years - fully 3 point above the "conventional" home loan for the same amount of money.
If ever there was a place for governmenal intervention, it would be for parity in financing ALL homes.
The exorbitant interest rates charged is just short of usury, by comparison to "conventional housing." My wife and I have found an excellent 2,100 s.f. manufactured - custom built - on owned land. When searching for lenders to finance 40% of the purchase price, one feels like a leper.
The best I've found is a local lender who will write the loan at 7.75% for 15 years - fully 3 point above the "conventional" home loan for the same amount of money.
If ever there was a place for governmenal intervention, it would be for parity in financing ALL homes.
you won't get any disagreement from this corner. i used to finance mobile and modular homes, and that generation of homes was very nice - it was quite a while ago. now i continue to see people contribute to our forums with information that leads me to believe that there are more than a few lenders who are willing to do fha title 1 financing on mobile/modular/manufactured housing. if i had the names on the tip of my tongue, i'd pass them along to you. my presumption is that you'd find rates to be better than what you've discovered so far; though i still believe that rates are going to be higher than for your ordinary stick-built home.
that can be explained, at least in part, by the marketability of the homes. the american public simply desires other types of housing more often.
i hope one of those posters happens on your query, so that you can get some assistance at a more acceptable interest rate. if i learn of anyone, i'll pass along the information gladly.
that can be explained, at least in part, by the marketability of the homes. the american public simply desires other types of housing more often.
i hope one of those posters happens on your query, so that you can get some assistance at a more acceptable interest rate. if i learn of anyone, i'll pass along the information gladly.
I own 3 properties, renting 2. I purchased a manufactured home to set up on the third un-improved property for primary residence. Seeking 80-90k to complete set up, improvements, and consolodate debt.
To Carl,
There are lenders in this community with whom you can seek a no-obligation free mortgage consultation with them. If you meet the eligibility criteria in terms of credit, income, etc. the lenders will offer you assistance to get the loan to complete the improvements and consolidate your debts.
To Amanda,
It is possible to get an FHA-insured loan on a manufactured home. The HUD Title I program is one such loan program that helps you get a loan to finance the purchase of a manufactured home. But the manufactured home must meet the HUD-specified property eligibility conditions and should have a permanent foundation.
There are lenders in this community with whom you can seek a no-obligation free mortgage consultation with them. If you meet the eligibility criteria in terms of credit, income, etc. the lenders will offer you assistance to get the loan to complete the improvements and consolidate your debts.
To Amanda,
It is possible to get an FHA-insured loan on a manufactured home. The HUD Title I program is one such loan program that helps you get a loan to finance the purchase of a manufactured home. But the manufactured home must meet the HUD-specified property eligibility conditions and should have a permanent foundation.
I am buying a manufactured home on a lease purchase the value of the home and land is $170,000 to $185,00 I put $20,000 down a have been making the payments for 29 months of $1100.00 per month. I need to get a new mortgage as the old one is in the sellers name. I need one in my name. I paid 157.000 for the property the balance is approx. $127.000 I would like to pull out $20.000 and put a porch and stem wall on the property. What type of mortgage and Interest rate am I looking at? my credit score is 647. also I have the title to the property already.
i currently have a private loan with interest rate of 13%. purchased mobile and land for 140,000 in 2006 with a down payment of 60,000 and balance due of 80,000. i need to refinance this loan so my payments will be smaller. i have not missed one payment in 3 years to the lender and my fico score is 639. i am currently employed in medical field.
caryn, wouldn't your current lender be amenable to a refinance? your history, credit score that's sufficient, etc. ought to make you eligible.
is there anyone who will finance a mobile home with poor credit
To jstanford,
It is almost impossible to get mobile home loan with poor credit. You need to have at least 620 credit score in order to get a loan. There are not too many lenders who offer mobile home loans in this market. The few who still offer such loans require a borrower to have good credit. By the way, how bad is your credit?
It is almost impossible to get mobile home loan with poor credit. You need to have at least 620 credit score in order to get a loan. There are not too many lenders who offer mobile home loans in this market. The few who still offer such loans require a borrower to have good credit. By the way, how bad is your credit?
it's difficult enough for people to get credit to purchase a mobile home when they have good credit; how much more difficult will it be for someone with "bad" credit? unfortunately, "bad" credit won't take you very far at all. no matter what the type of loan you're seeking, you really need to have "decent" credit these days, at worst.
My modular home is six years old. It does not have a stem wall. where can I find a reputable place to refinance it?