mobile or manufactured homes - Homes that are built off site and are on their own steel under carriage with wheels and axles and pulled to the site. They are usually double wide or triple wide, but can be single wide. If put on a permanent foundation with wheels and axles removed, it is taxed as “real property.”
There are investment loans for mobile homes. With the low cost of a mobile home it is easy to cash flow.
If you don't own the land that the home rests on, then it is treated more as a consumer loan than a traditional mortgage. It is very similar to an auto loan.
It is important to know that manufactured homes are also similar to auto loans in that they will depreciate. That means the value will decrease over time. Because the home will depreciate, it represents a greater risk to a lender, and you will pay for it with a higher interest rate on your loan.
Generally, if you are hoping to build equity in your home, then buying a manufactured or mobile home is a bad idea. If you can afford it, purchasing a traditional stick-built home is a much wiser investment. However, if you do not care about building equity in your home, and you simply want a nice, affordable place to live, then you may want to consider a manufactured home. They are much less expensive. In fact, you can get very nice used homes for as little as $20,000 - $30,000.
In order for you to qualify for a Mobile Home loan, the mobile home must be permanently set-up on the land. It must be set on a cement pad, have its wheels and hitch removed, and must have skirting installed between its base and the cement pad.
Mobile home loans can be some of the most difficult loans to get approved. Work closely with your broker. Make sure your mobile home meets the 2 basic requirements prior to your loan search. It must be on a permanent foundation. It must be built after 1974.
VA and FHA loans are very good loans to obtain a manufactured home with.
Buying a HUD Manufactured Home - When considering buying a HUD manufactured home, it is important to understand what a manufactured home is.
A Manufactured Home is designed and constructed to the Federal Manufactured Construction and Safety Standards, which was created by the Department of Housing and Urban Development. For that reason, manufactured homes are also called HUD manufactured homes.
A manufactured home is factory built.
A HUD manufactured home is different from a modular home, which is also at least partially factory built. A modular home, also known as a UBC modular home, is built to the Uniform Building Code (UBC), which is the code that site built homes are built to.
If you lease the land that your HUD manufactured home rests on, such as in a park, your financing options will be more limited. Although there are still lenders willing to give you a loan, you will pay a higher interest rate and the guidelines for the loan will be more strict. This means that you may have a more difficult time obtaining a loan.
The term "manufactured home" was introduced in 1980 by the US Congress to describe a type of house that is constructed in a factory to comply with a building code developed by the Department of Housing and Urban Development.
Most lenders, including most banks, will not do loans on HUD manufactured homes. Those that do generally have Loan-To-Value restrictions, that is what percentage of the home's value will they loan out. Some are quite liberal, but their rates can seem high.
A mortgage broker can find the right lender for your situation.