Mortgage financing for manufactured homes
Manufactured homes have long been a practical housing option for many families in South Carolina. Mortgage financing for these properties has always been a bit more difficult to obtain than for other types of housing. Mark Wells at Preferred Financial Services discusses currently available lending programs for manufactured housing.
I wanted to get a loan for my mobile home, but when I applied for a mortgage, the lender said I could not get a mortgage for a mobile home. Why not? One of the things that make manufactured housing different from standard housing is that the home comes off the factory floor on wheels and is actually titled as a vehicle when it is delivered to a dealer, and subsequently to you. So trying to finance a mobile home with a mortgage is like trying to get a house loan on a vehicle—you can’t do it.
But I’ve heard that there are mortgage programs for manufactured housing. How do you get those? This can only be accomplished by putting the mobile home on a piece of property that you own, permanently affixing the manufactured home to the property on a permanent foundation, removing the wheels and axles from the home, and retiring the vehicle title to obtain a real-property title.
What constitutes a permanent foundation? The home must be set on concrete footings and underpinned with concrete or brick columns, just like a standard home would be built. FHA further requires that a foundation curtain wall made of masonry (brick or cement block) must be in place around the outside perimeter of the home, enclosing the crawl space. Conventional programs allow for a vinyl skirting instead of the masonry curtain wall, but still require the concrete footings and piers.
How do you retire the title to a manufactured home? This must be done by a real estate attorney, who will coordinate the retiring of the title with the Department of Motor Vehicles and the re-titling of the property as ‘real estate.’ The attorney will take care of the county and state requirements for recording the change and for altering the property-tax structure of the home. In restructuring the property taxes, you will pay a homeowner’s tax rate in a single bill, rather than paying your lot taxes and your mobile-home taxes separately.
What kind of rates can I get for a mortgage on a manufactured home? FHA rates are right around 4.0 percent at this time, and you can generally qualify for an FHA loan with credit scores over 640. Conventional rates are slightly higher and usually require a 660 or higher score, but have the benefit of dropping any PMI premium associated with the mortgage once the loan balance reaches 80 percent of the value of the home.
I welcome questions and comments and am happy to assist you with any manufactured housing financing you may need. I can be reached at 864-235-9596 or Mark@TheGreatestRates.com.
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