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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.

Related Readings
Related References:
Hi Marie,

With a poor credit, it will be very difficult for you to get qualified for a mortgage. You will have to take steps to improve your credit before you apply for a loan. You can take help of the given page in order to know some steps to improve your score: http://www.mortgagefit.com/credit-rating/credit-repair.html
Posted on: 07th Feb, 2013 08:34 pm
I have bad credit and am having a hard time finding lenders who will work with me. Do you know of anyone that will work with me with bad credit. I do have a cosigner if needed.
Thanks!
Posted on: 15th Feb, 2013 05:22 pm
Hi Vicky,

With a bad credit, it will be difficult for you to get a loan alone. A co-signer may help you in getting a loan. When you apply for a loan, inform the lender about the co-signer. If the co-signer has good credit, then getting a loan will be easier for you.

Thanks
Posted on: 17th Feb, 2013 10:40 pm
My husband and I are considering renovating our 1985 1450 square foot manufactured home. We have no debt on it or the 19 acres where it resides. We have excellent credit ratings of over 800. We would like to add rooms and renovate rooms. The house is tied down but is not on a concrete foundation. My husband is a Texas veteran. Are there loans available to us?
Posted on: 28th Feb, 2013 09:55 am
Hi Susan H,

As your husband is a veteran, he can get a VA loan. He can get in touch with the local VA lenders and check out his loan options.
Posted on: 28th Feb, 2013 10:26 pm
i need to refinance my home. i am a disabled veteran and currently the home is in my wife name. i want to do a va guarantee loan to lower our interest rate. currently we are paying 12% interest. our mobile home is roughly 1900 sq foot on 15 acres. i do have my letter of eligibility for va and dd214.
Posted on: 04th Mar, 2013 12:00 pm
My husband and I have good credit. We have a 1998 double wide manufactured home that is currently on family land that we do not own. We would like to purchase some land and move our home to the new land. Is there a loan program that allows this? We owe $42,000 on the home.
Posted on: 04th Mar, 2013 01:47 pm
Need info on how I can transfer ownership of my parents mobile
home which has a loan.
Posted on: 04th Mar, 2013 05:12 pm
Hi!

Welcome to the forums!

To Douglucas,

You can contact the local VA lenders and apply for a VA refinance on your mobile home. If you meet the required criteria of the lender, you will be able to qualify for the loan.

To Guest,

You will have to speak to your lender in order to know whether or not he will allow you to refinance the mortgage to buy some land as well as move the mobile home. Normally, once the lender gives a loan on a mobile home, he would prefer you not to move that home from the land.

To Pepsi,

You can ask your parents to sign a quitclaim deed and transfer the property to you. Once the transfer is complete, you will have to refinance the mortgage in your name.

Feel free to ask if youve further queries.

Sussane
Posted on: 04th Mar, 2013 10:41 pm
I own my manufactured home but am looking to borrow $5,000-$10,000 against it. Is that something you can do?
Posted on: 07th Mar, 2013 04:16 pm
Hi Doris,

It may be difficult for you to get qualified for such a small loan amount. But there is no harm in trying. you should contact the local lenders and check out if they can help you in this regard.

Thanks
Posted on: 08th Mar, 2013 12:28 am
I am currently looking for a loan to purchase a mobile home in a park my credit score is 591 I have great job history but don't have any long term payment history I do have a willing cosigner but have been told it doesn't help can u helpe find somewhere that will help me het a loan
Posted on: 09th Mar, 2013 06:14 pm
Hi josh,

It is true that with a credit score of 591, it will be difficult for you to get qualified for any kind of loan. But if you have a co-signer with good credit scores, then the lender normally gives the loan. I will suggest you to get in touch with other lenders and check out if they can help you with a loan.
Posted on: 10th Mar, 2013 11:05 pm
i would like to refinance my home. a double wide on .75 acres. my rate is 6.25%. my home is on a permanent foundation and i owe approx. 63000.00. and my credit score is 765. can't find anyone to refinance a manufactured home. what is your advise?
Posted on: 13th Mar, 2013 09:19 am
Hi, I own my moble home have no mortgage at all but would like to take loan to do some repairs on it what loan companys do this I live in New Jersey all the help on this matter would be great thanks for your time and help
Posted on: 13th Mar, 2013 10:31 am
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