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Mobile home loan – A less costly option to buy homes

Posted on: 28th Jun, 2005 04:53 am
If you're looking for a relatively less costly housing option than a traditional home, then one good choice available before you is the mobile or manufactured home. Mobile home, also called as trailer or caravan, is gradually becoming a popular housing option to many home buyers. Though a mobile home may look like a traditional home but it is comparatively little difficult to finance this type of home than to finance a traditional one. With little more effort, however, you can find out the required financing option too. If you want to know about mobile home loans, check out the following topics:

What are the types of mobile home loans?

Finding out the right mobile loan product can save a lot of money for you. Here is an outline of different financing options that may help you select the right product. These loan products are categorized on the basis of land ownership, lending authority and some other factors.

    On the basis of land ownership:


  • Personal property loan: If the manufactured property is not on a permanent foundation and if it is purchased separately, then you have to take out a personal property loan. When you own a land on your own, then personal property loans may be required to finance the purchase of a mobile home. In comparison to traditional home financing, the qualifying standards for personal property loans are relatively lenient.

  • Mobile home mortgage loan: If the manufactured property that you want to purchase is on a permanent foundation, then you have to take out a mobile home mortgage loan. These loans are relatively difficult to qualify than the personal property loans. These loans also require higher upfront costs than the personal property loans.

  • On the basis of lending authority:


  • Federal programs: Title I and Title II loans are offered by the lenders approved by the Federal Housing Administration (FHA), to buy mobile homes. To qualify for these FHA-approved loans, mobile homes must conform to the HUD Code and must be located on approved foundations.

    Manufactured home loans, guaranteed by the Department of Veteran's Affairs (VA), are available for for the veterans. This 100% VA financing is available if the mobile homes are located on approved foundations. The United States Department of Agriculture (USDA) also offers financing for the purchase of manufactured homes.

  • State and local housing agency programs: Mobile home loans are offered by the State Housing Finance Authorities/Housing Agencies to the first time home buyers at relatively lower rates.

  • On the basis of other factors:


  • Construction loans: These are short term loans designed to help you build a mobile home on property you have already purchased. Short term, high interest construction loans may also be available to help you make improvements on your home or property.

  • Home improvement loans: This type of loan is designed to help you make improvements to your mobile home. An example of this type of loan is a Title 1 Home Improvement loan insured by the FHA. Some states offer special loan programs in addition to the Federal government's tax deduction for certain energy efficient improvements.
  • In addition to the options stated above, there are also mobile home refinance and equity loans available from specific lenders. All you need to do is decide why you want to take out the loan and choose the one that is right for you.

What are the requirements to qualify for mobile home mortgages?

Usually mortgage loans are not offered for the purchase of manufactured homes which were built before 1976. This is so because the lenders take a close look at the condition of the house before offering a loan. A manufactured home must comply with the building standards proposed by Department of Housing and Urban Development (HUD). Here are the requirements to qualify for a manufactured home loan -

  1. The HUD Code requirements:
    • As per the HUD Code, the home must be built as 1/2/3 section homes at a protected place. Then the home has to be shifted to the site. Thereafter, the wheels and axles must be removed so as to give it a permanent foundation.
    • The home should follow the HUD Code pertaining to quality, design, transportability, durability, energy efficiency and fire resistance.
    • The manufactured home should pass the third party property inspections.
  2. Credit score:
    Mobile home lenders require a minimum credit score of 680 to offer a mobile home loan. With a credit score higher than that, you can get better rate.

  3. Ownership rights:
    • The mobile property that you are purchasing should be clear of any liens. The property under consideration may also be managed by a co-operative association.
  4. Down payment:
    • Depending upon several factors such as the type of loan, value of the home and your credit standing, you may be required to make down payment of 5-10% of the purchase price of the home.

What are the steps that you need to follow to obtain mobile home financing?

If you are planning to buy a mobile home, you need to follow some steps. Some of these steps are same as followed in the general home buying process, whereas some of the steps differ. Here are the steps that you need to follow:


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What tax benefits do mobile home loans offer?

If the loan is a mortgage, secured by the mobile home that is your primary residence, then the Federal government will allow you to deduct the interest and property taxes you pay from your income taxes, provided you have purchased the home before September of the tax year. In addition, some states allow you to deduct your property taxes from your state income taxes, provided the Federal timing requirement has been met.

Some states, like Indiana, may permit you to deduct all or part of the rent you pay for the lot your mobile home rests on. In order to determine whether your state will permit you to deduct the lot rent, you should consult a tax professional in your state.

Related Readings
Related References:
Hi Judee,

I haven't heard of any such law which states that if you've a mobile home in a park, you won't be able to refinance your home loan. You should contact other local lenders of your area and check out if they can help you in getting a refinance.

Feel free to ask if you've further queries.

Sussane
Posted on: 29th Dec, 2010 08:19 pm
i do not have good credit is there a chnace i would be abally to get a loan
Posted on: 30th Dec, 2010 12:32 pm
We have been searching for a reputable company who will give us a home loan. Many of the homes we have run across in sullivan county, ny would be a good fit forus, are of good quality, and on foundations. Our problem is tht lenders say right off that they will not finance mobile homes. We are looking for a 30 year fixed rate. Please reply.
Posted on: 30th Dec, 2010 02:00 pm
Posted on: 30th Dec, 2010 07:45 pm
I want to know if I sell the 2007 manufactured home are there loans available for this type of property and what tpye of loans (USDA)?
Posted on: 01st Jan, 2011 03:18 pm
Welcome CONNIE,

Manufactured or mobile home loans are available in the market in order to finance such properties. Apart from this, personal property loans are also available in the market for such properties.
Posted on: 02nd Jan, 2011 10:24 pm
I filled out the form for application and when finished, I clicked for lenders but could go no further because a pop up asked, "Please select interest rate." The problem- there was no option asking me that!
Help!
Posted on: 03rd Jan, 2011 12:59 pm
Hi Michael!

Welcome to forums!

Which website did you try filling out the application form? If you're unable to fill out the form and submit it, then you should contact the Site Admin of that website and try to sort out the issue.

Feel free to ask if you've further queries.

Sussane
Posted on: 03rd Jan, 2011 09:36 pm
We are under a construction loan due to expire on 2/1/11 - we tried to refi it through our regular Credit Union but was declined (a separate issue I am dealing with. The CU gave us $22,000 to consolidate car notes and credit card bills 6 weeks ago but now say we are not credit worth for a mortgage. Already wrote to the chairman of their board). Anyway we are filing today with the bank holding the construction loan and they want to charge us 6-6.5% interest on a ARM... Our Mobile home is now a permanent structure with paved 6 car driveway, poured patio and screen room out back. I find these rates they are quoting outrageous - I feel they are doing this for 2 reasons: 1) they know nobody else finances mobile homes here and 2) they know we MUST refi by 2/1/11! We feel stuck! They only charged us 6%on the construction loan. What recourse do we have. Thank you.. Mary Miller

[Contact details deleted as per forum rules. Thanks.]
Posted on: 04th Jan, 2011 05:57 am
I own a 1989 single wide on 10 acres I owe 17500 I would like to refinance to do some improvements and pay off some debt. Is tere a special bank I should contact. The bank I have is not doing moblie home loans anymore.
Posted on: 04th Jan, 2011 08:04 am
Hi diane,

You should contact other local lenders in your area and check out if they can help you with a mobile home loan. You can even contact the lenders offering personal property loans in order to get a mortgage. However, personal property loans are available at a higher interest rate.

Thanks.
Posted on: 04th Jan, 2011 08:38 pm
I want to make sure I understand things correctly:) Me and my husband are both 55 or older and may be looking into buying a mobile home in a park where you pay rent for the space. What is you advice of where to start and who and what type of finacing to go for? We have never owned a home before so this would be a first:) Thanks for you help
Posted on: 05th Jan, 2011 05:55 am
my daughter and son in law are trying to buy a mobile home from me. The mobile home has a foundation and has approx 16 piers under it and they have mortor joints between the blocks and caps on the top. It has approx 1.6 acres in country. The mobile home is a 16 x 80 and has new doors on it and a new roof. how do they apply for a loan with 3,000.00 down. The asking price is 55,000.00 . I have 61,500.00 in it with the land. It has city water and a septic tank on it. 3 bed rooms and two bathrooms. Please advise Thank you Howard Canfield 330-464-1593 or howard_canfield@hotmail.com
Posted on: 05th Jan, 2011 09:23 am
the price of the mobile home is $45,000 i am putting down $5.000 where can i get a mortgage fixed rate? my vredit score is 770 i have $3,000 in debit
Posted on: 08th Jan, 2011 05:33 am
i have a home equity loan on a mobile home and land that is almost paid for. the insurance co. canceled my insurance because i am no living in moble home because there is mold in it. do i have to find more pmi or just fix the mobile home which will cost more than it is worth. it is a 1984 fleetwood.
Posted on: 11th Jan, 2011 07:57 am
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