Financing Your Manufactured Home
Loans for manufactured homes are available from Fannie Mae and Freddie Mac. The United States Department of Agriculture (USDA) and the Veterans Administration (VA), are other avenues to finance a manufactured home. Personal loans can work, too.
What’s available to you depends on your eligibility as a borrower, the type and age of the structure, and whether it’s considered real or personal property. Manufactured housing allows many to buy homes who could not otherwise afford home-ownership. Fortunately, there are many available options for financing these purchases.
Is The Home “Real” Or “Personal” Property?
Not all manufactured housing is considered real estate, which is a requirement to qualify for a traditional home loan.
If your mobile home is at least 400 square feet, on an approved foundation and taxed as real property, you can apply for conventional or government-backed mortgages.
If you pay annual fees to the DMV, or the building is still on wheels, however, you’re technically living in a vehicle, not a house.
That’s okay, though. Moveable mobile homes can still be financed, just not with home mortgages.
Financing For Moveable Homes
Manufactured housing loans for personal property — homes that are not classified as real estate — are readily available if you have at least five percent down and the home is reasonably new.
Interest rates are higher than mortgage rates because loans for movable property are riskier for lenders.
The Federal Housing Administration (FHA) backs loans for mobile home vehicles with its Title I program. Interest rates are negotiated between borrowers and private lenders offering this loan type. Keep in mind that the typical home lender might not offer this type of loan.
The interest rate is fixed for the entire loan term, which varies and there are also maximum loan amounts.
Many manufactured home loan programs have strict guidelines about the property condition and age. That’s because manufactured housing tends to depreciate, while traditional home values tend to increase over time.
If you’re set on purchasing a home that doesn’t meet lender requirements, another option is a personal loan. Good credit will be required to get an unsecured personal loan, because it’s not attached to property. Expect to pay a higher interest rate — at least three-to-four percent more than current mortgage rates.
About Author: Gina Pogol writes about personal finance, credit, mortgages and real estate. She loves helping consumers understand complex and intimidating topics. She can be reached on Twitter at @GinaPogol.
Source: The Mortage Reports
