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Financing Manufactured Housing And Mobile Homes

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Home Mortgage BasicsYou Can Finance Your Manufactured Home

Since the dawn of the automotive age, mobile homes have been convenient options for consumers to purchase as habitats, with or without title to land on which to place these abodes. In its modern form, the humble mobile home is now called a manufactured home, and it is a low-cost way to become the owner of your domain.

Historically, manufactured housing has had a reputation of sorts. However, standards of construction and design have improved dramatically. Prefabricated homes have a range of niche uses from vacation homes to senior housing. The ability to move homes on site, assemble the sections and connect utilities rapidly makes them ideal to support disaster relief and other temporary housing needs.

Mobile Versus Manufactured Defined By A Date

The name comes from being prefabricated structures, transported complete or in sections by road to the community where the owners will live. Manufactured homes are most often doublewide, meaning two sections or more joined side-by-side, transported separately and joined on site; these are more popular and hold value better than singlewide homes that arrive onsite complete.

The most significant distinction is that mobile homes ended production before June 1976, and manufactured homes entered production after that month. Pre-1976 mobile homes are not financeable, but you can obtain loans for newer manufactured homes if they meet state and HUD regulations that facilitate national distribution by manufacturers. FHA, USDA, and VA insured loans are available for manufactured housing whether the home is sited on a purchased or leased lot.

Appreciating Personal Property Or Real Estate Depreciation

Manufactured homes lie on the boundary between personal property and real estate, sometimes are convertible from one to another. In real estate, the value resides in the land, which cannot be moved or removed by definition and so its value cannot depreciate, merely changed by its use and zoning, but all of the structures on the land are subject to depreciation.

Manufactured housing depreciates more rapidly than conventional site-built structures; it has a direct impact on the ability of owners to finance the purchase of it. Singlewide homes depreciate more quickly than doublewides. The standards of construction in manufactured homes have improved to justify treatment as conventional housing structures. However, the status of a particular home is determined by many factors including the laws of the state.

Refinancing Manufactured Homes

When manufactured homes hold title as personal property, they are financed by chattel loans of fifteen to twenty years at sub-prime interest rates. Converting the title to real estate enables borrowers to refinance chattel loans to mortgages at lower rates of interest. Refinancing will require that you have the title to the lot and a permanent foundation. Manufactured homes are a specialization for some realtors, who deal with nothing else. By becoming experts in manufactured home sales, they can help buyers find the right financing and get settled in as comfortably as owners of any other type of home.

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Trace Richardson has written 638 articles on BankChirp.com

I'm Trace Richardson and am the founder of LeadPress. I’m a licensed California Real Estate broker and a former equities trader previously holding the Series 7, 63, 55 and 24 securities licenses.

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