Blog

Feb
21
Manufactured Housing Financing Expanding

Finding affordable housing in many areas can be daunting. Manufactured housing (new and existing) can certainly solve the affordability challenge; however, all to often finding suitable and reasonable financing can derail even the most persistent home buyer. Most lenders simply do not choose to offer financing for manufactured housing. It is important to understand that financing for manufactured homes has always been available in the marketplace….FHA, VA and Fannie/Freddie have no issue with financing manufactured housing. Individual lenders have, for the most part, determined that offering financing for the manufactured housing sector just did not have sufficient ROI (Return on Investment).

Thankfully, the opportunity and options for financing manufactured homes is expanding. A mere couple years ago FHA was the only viable option. Today, through a network of lenders, it is completely possible to finance a manufactured home using FHA, VA and Conventional financing. Even more encouraging is the opportunity to obtain financing to renovate, or remodel, an older manufactured home! This is HUGE!

There are common guidelines for most financing options for manufactured housing:
1). The unit must be manufactured after June 15, 1976
2). The unit must be double or triple wide
3). The unit must be affixed to a permanent foundation
4). The unit must be owned occupied
5). The land and the unit are owned as “fee simple” (no leased or rental lot space is allowed)

Pretty simple requirements. To be sure, all of these “qualifications” are specific to the property. Borrower qualifications are specified by the product and the lender (FHA, VA, Conventional, and specific lender overlays (additional guidelines specific to individual lender).

The down payment requirements for virtually all manufactured home financing are very reasonable.
A). VA allows for Zero (0)% down payment AND gifts for closing costs
B). FHA allows for 3.5% down payment and gift funds can cover both down payment and closing costs (up to 6%).
C). Conventional financing requires 5% down payment of the borrowers own funds; any amount over can be gifted
In all cases, lender credits (rebate pricing) can be used to reduce (or eliminate) closing costs.

The opportunity to finance renovations, or remodel, of an existing manufactured home has historically been almost impossible to find. Basically, it was a given that you would finance the property, but any updating or improvements would either require cash or credit cards (with their very high interest rates). Finally, there are lenders that are expanding their guidelines to include updating older manufactured homes. Many Seniors live in manufactured homes and the ability to renovate the home to accommodate various disabilities and physical restrictions is a major improvement for allowing them to stay in their own home.
And, for the first time in many, many years I have lenders who will allow a construction type loan for purchase of the land and the manufactured unit. The process is not much more detailed than traditional financing and certainly helps in addressing the cost of home ownership in, and around, many metro areas.
There are down payment assist programs that allow up to 2% of the sales price, further reducing the funds needed to purchase a home (specific guidelines apply; however, the program is available in almost all States).


This licensee is performing acts for which a real estate license is required. C2 Financial Corporation is licensed by the California Bureau of Real Estate, Broker #01821025; NMLS #135622. Loan approval is not guaranteed and is subject to lender review of information. Loan is only approved when lender has issued approval in writing. Specified rates may not be available for all borrowers. Rate subject to change with market conditions.
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The services referred to herein are not available to persons located outside the state of California Washington, Oregon and Texas.

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