Financing a Mobile Home purchase often will take several extra steps and procedures than if one were to purchase the mobile home outright from a dealer. The following general information provides some additional insight guidelines from HUD that may help.
Anytime you are looking to place a home in a Mobile Home Park, it is highly recommended that you coordinate directly with the Mobile Home Park to ensure realistic availability, measurements and estimated timelines.
Keep in mind, the mobile home dealer is typically only working on ordering and delivering the mobile home. Whereas, the Mobile Home Park has to address site plans, set backs, grading, utilities, accessibility (trees, turning radius, obstacles etc.) Stairs, landscaping, sidewalks, patios, and parking just to mention a few areas that the Mobile Home Park typically has to address in one form or another.
In other words, in order to have a successful mobile home move in and set up, it is imperative that the resident and dealer have a respectful understanding and cooperation with the Mobile Home Park and the logistics that others must endure. The mobile home dealer will work on the file for a few months, the Mobile Home Park and resident will be working with the end result for years. Get a done right the first time.
Therefore, ensure that the Mobile Home Park receives, clear, concise and accurate updates on the entire process. It will make the entire project flow much better for everyone for years to come. The following is a little more on Mobile Home Financing options per the HUD.Gov website.
Under the Title I program, FHA approved lenders make loans from their own funds to eligible borrowers to finance the purchase or refinance of a manufactured home and/or lot. FHA insures the lender against loss if the borrower defaults. Credit is granted based upon the applicant’s credit history and ability to repay the loan in regular monthly installments.
FHA does not lend money; FHA insures loans in order to encourage mortgagees to lend. Title I manufactured home loans are not Federal Government loans or grants. The interest rate, which is negotiated between the borrower and the lender, is required to be fixed for the entire term of the loan, which is generally 20 years.
Purpose of the Loan
A Title I loan may be used for the purchase or refinancing of a manufactured home, a developed lot on which to place a manufactured home, or a manufactured home and lot in combination. The home must be used as the principal residence of the borrower.
Manufactured Homes Placed on a Leased Lot
For Title I insured loans, borrowers are not required to purchase or own the land on which their manufactured home is placed. Instead borrowers may lease a lot, such as a site lot within a manufactured home community or mobile home park. When the land/lot is leased, HUD requires the lessor to provide the manufactured homeowner with an initial lease term of 3 years. In addition, the lease must provide that the homeowner will receive advance written notice of at least 180 days, in the event the lease is to be terminated. These lease terms are designed to protect homeowners in case the lessors sell the land or close the park.
Maximum Loan Amount
- Manufactured home only – $69,678
- Manufactured home lot – $23,226
- Manufactured home & lot – $92,904
Maximum Loan Term
- 20 years for a loan on a manufactured home or on a single-section manufactured home and lot
- 15 years for a manufactured home lot loan
- 25 years for a loan on a multi-section manufactured home and lot
Locating a Dealer
Manufactured homes are usually purchased through dealers or retailers that sell the homes. The names of lenders in your area which specialize in financing manufactured homes can be obtained from local retailers. These retailers are listed in the yellow pages of your telephone directory. They have the required application forms.
Manufactured homes must comply with the Model Manufactured Home Installation Standards, and all applicable state and local requirements governing the installation and construction of the manufactured home foundation system.
HUD provides two types of consumer protection. The borrower must sign a HUD Placement Certificate agreeing that the home has been installed and set-up to their satisfaction by the retailer before the lender can give the loan proceeds to the retailer.
Eligible Borrowers Must
- Have sufficient funds to make the minimum required downpayment.
- Be able to demonstrate that they have adequate income to make the payments on the loan and meet their other expenses.
- Intend to occupy the manufactured home as their principal residence.
- Have a suitable site on which to place the manufactured home. The home may be placed on a rental site in manufactured home park, provided the park and lease agreement meet FHA guidelines. The home may be situated on an individual homesite owned or leased by the borrower.
An Eligible Manufactured Home Must
- Meet the Model Manufactured Home Installation Standards.
- Carry a one-year manufacturer’s warranty if the unit is new.
- Be installed on a homesite that meets established local standards for site suitability and has adequate water supply and sewage disposal facilities available.
The proceeds of a Title I manufactured home loan may not be used to finance furniture (for example, beds, chairs, sofas, lamps, rugs, etc.). However, built-in appliances and equipment and wall-to-wall carpeting are eligible for financing.
Want Advice on Buying a Home?
HUD encourages those who are considering a home purchase to talk with a HUD-approved housing counseling agency for guidance. These agencies offer free assistance to consumers in meeting their specific housing goals. A housing counselor can assess your financial situation, determine available options, and is familiar with various HUD programs and other local community resources.
HUD-approved counseling agencies are located throughout the country. You can find a counseling agency near you by calling (800) 569-4287 (toll-free). Or, search for HUD-approved housing counseling agency near you by visiting the following website: http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm
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