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:
CAN MOBILE HOME LOANS BE MODIFIED AND IF SO WHAT ARE THE REQUIREMENTS?
I recently went through a divorce and need money to help pay off bills, and make repairs. I've been a stay-at-home mom for years and recently went back to work, my credit is below 500, live in a single wide (still making payments) with no permanent foundation. Can I get help?
Who would you recommend as a good mortgage to go through?
hello mam,
my name is brittney and i am 20 years old i am intrested in buying a repoed home which they are asking 67,000 and i would like to get a loan for 55,00 and the rest out of pocket to be honest its the best little house it needs work but its such a great start and close to my family i am a first time buyer and when people see that they judge i curently have no credit any which isnt a bad thing i really need some help is their anyway possible that you can lead me to that?? or lead me to someone that can??
thanks so much please get back with me
brittney
my name is brittney and i am 20 years old i am intrested in buying a repoed home which they are asking 67,000 and i would like to get a loan for 55,00 and the rest out of pocket to be honest its the best little house it needs work but its such a great start and close to my family i am a first time buyer and when people see that they judge i curently have no credit any which isnt a bad thing i really need some help is their anyway possible that you can lead me to that?? or lead me to someone that can??
thanks so much please get back with me
brittney
my husbands credit was 628, which I know needs improvement, but it was enough for a loan. We were told that when a mortgage company checked his credit that it would not have any affect since he was trying for a mortgage loan. Now it has dropped to 611, so now he cannot get a loan right?
Hi Cindy,
No, he may not get a loan with a credit score lower than 620. Your credit score should be at least 620 to get a home loan, and that too FHA loan. Whenever you will apply for new credit, may it be a loan, a new credit card, etc, the lender or the creditor will pull a copy of your credit report. This is known as hard pull, and is going to lower your score by some points. Thus, he will have to first improve his credit score to get a home loan. Can you give more details on his credit?
Thanks,
Sandra
No, he may not get a loan with a credit score lower than 620. Your credit score should be at least 620 to get a home loan, and that too FHA loan. Whenever you will apply for new credit, may it be a loan, a new credit card, etc, the lender or the creditor will pull a copy of your credit report. This is known as hard pull, and is going to lower your score by some points. Thus, he will have to first improve his credit score to get a home loan. Can you give more details on his credit?
Thanks,
Sandra
I currently reside in a 14 x 62 mobile home built in 1986, in Mayfair Manor in Sicklerville, NJ. I want to put it on the market and purchase a new one in Shenandoah Village, also in Sicklerville. I have great credit (score of 720), and will have no problem financing that one, but what options do prospective buyers of mine have? I was told by my local bank who finances mobile homes, that the home has to be younger than 15 years. Please advise me. Thank You, Carole Watkins
Hi Carole,
As far as I know, mobile homes built prior to 1976 do not qualify for mortgages. The lenders are concerned about the depreciation of such properties. But, as your property is built in 1986, your buyers will be able to qualify for a loan provided they meet the required criteria of getting a mortgage.
Thanks
As far as I know, mobile homes built prior to 1976 do not qualify for mortgages. The lenders are concerned about the depreciation of such properties. But, as your property is built in 1986, your buyers will be able to qualify for a loan provided they meet the required criteria of getting a mortgage.
Thanks
I want to get a loan to purchase a mobile home not on a permanent foundation and the lots that go with it. How do I go about that?
Hi LaRayne,
As the mobile home does not have a permanent foundation, it will be difficult for you to get a conventional mobile home loan. You will have to contact the retailers who sell mobile homes and get a personal property loan from them. However, it should be kept in mind that these loans are available at higher interest rates. Thus, you should go for the loan only if you think that you will be able to afford the higher interest rates.
Thanks,
Jerry
As the mobile home does not have a permanent foundation, it will be difficult for you to get a conventional mobile home loan. You will have to contact the retailers who sell mobile homes and get a personal property loan from them. However, it should be kept in mind that these loans are available at higher interest rates. Thus, you should go for the loan only if you think that you will be able to afford the higher interest rates.
Thanks,
Jerry
i am looking for a loan to buy a 1972 mobile home on leased land. Do I have any options? My son would be willing to help do whatever is necessary. The home sits on piers and cannot be moved.
I have found a house that I am very interested in, it needs some work. How does a construction loan work? What does your credit score need to be at?
is there any loans out there for people with bad credit, and no income?
Hi Madeline,
Mobile homes which are built prior to 1976 do not qualify for home loans. Lenders are concerned about the depreciation of such properties. You can check out with the retailers who sell mobile homes and see if you can get a personal property loan in order to buy the property.
Hi anonymous,
Rather than going for a construction loan, it's better to go for a home improvement loan. Once the loan is generated, you will be able to use the proceeds to improve your property. If you go for a FHA insured loan, you will have to have a credit score of 620. In case of conventional loan, you need to have a score of 700-720.
Hi babygirl,
With a bad credit and no income, lenders won't be ready to give you a mortgage. Unless you have an income, you won't be able to pay off the loan dues.
Thanks,
Jerry
Mobile homes which are built prior to 1976 do not qualify for home loans. Lenders are concerned about the depreciation of such properties. You can check out with the retailers who sell mobile homes and see if you can get a personal property loan in order to buy the property.
Hi anonymous,
Rather than going for a construction loan, it's better to go for a home improvement loan. Once the loan is generated, you will be able to use the proceeds to improve your property. If you go for a FHA insured loan, you will have to have a credit score of 620. In case of conventional loan, you need to have a score of 700-720.
Hi babygirl,
With a bad credit and no income, lenders won't be ready to give you a mortgage. Unless you have an income, you won't be able to pay off the loan dues.
Thanks,
Jerry