Manufactured Home Mortgage
February 4th, 2010 | Author: weissheiss
A manufactured home is a home which has been entirely built in a setting where everything can be controlled. Federal codes must be adhered to and they must meet certain standards when complete. The US Department of Housing and Urban Development (HUD) is responsible for setting the codes by which the manufacturers must abide.
Mobile homes or trailers are not the same as a manufactured home. The latter has to meet certain standards which are not the same for trailers or mobile homes. The trailer or mobile home is a factory built home but they were not under the same code enforcement as manufactured based homes. They were built before the HUD code was introduced in 1976.
The Standards for Manufactured Based Homes
This code is very important to the manufacture of the homes we have today. In order to qualify for a manufactured home mortgage the home must meet certain standards. Unless you have dealt with a bank for several years and are in good standing with them, more than likely you will not be able to get a loan to purchase a trailer. Even if they approve you they will probably advise you against the purchase because there is no equity.
Manufactured homes must meet the following standards as set by HUD.
1- It must be built either in one, two or three sections. The center where it is built must be secure.
2- The manufactured home will be built using steel beams and each section must have wheels.
3- The standards set for the electrical, plumbing, thermal, heating and air systems are very high.
4- HUD sets very strict codes for all aspects of the manufactured home – energy efficiency, transportability, design, strength, construction, fire resistance and quality. If the manufactured home does not meet these codes it cannot be sold.
Obtaining a Manufactured Based Home Loan
Manufactured house/home loans depend on the home meeting all these requirements and undergoing an official examination by a third party. When it comes to borrowing the money for this type of home there are a few options to consider. One is a Title I loan. This is obtained through lenders and insured by the Federal Housing Authority (FHA). Basically they insure the loan in case of default by the home buyer. The loan is not a government loan and is not a low cost option. FHA sets the interest rates according to the current interest rate.
Other loan programs are available if credit requirements are met. They can be obtained through your personal bank or often the manufactured based home business has a bank which works with their company.
And their loans are easier to get if the home has been permanently affixed to the property. If the wheels have been removed and it is blocked underneath, it is considered the same as a home that had been built on the property.
The difference between financing this type of home and a site-built home is not much different. The only thing that comes into consideration is the purchaser’s credit, the age of the home and the appraisal of the home. It must appraise for at least as much as the selling price.
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