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?
- What are the requirements to qualify for mobile home mortgages?
- What are the steps that you need to follow to obtain mobile home financing?
- What tax benefits do mobile home loans offer?
- Top 20 Mobile home loan FAQs
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.
- 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.
- 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.
- 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.
On the basis of land ownership:
On the basis of lending authority:
On the basis of other factors:
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 -
- 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.
- 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. - 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.
- 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:
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.
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
- Can mobile home be used as collateral to get personal loan?
- Mobile Home Reverse Mortgage for seniors
Related References:
hi jessica i have a credit score of 530 and i have land that i can use for collateral is there any loan that i can get to purchase a mobile home?
Hi Guest,
With a credit score of 530, it won't be possible for you to qualify for a loan in order to purchase a mobile home. You should take steps to improve your score and then apply for a loan.
With a credit score of 530, it won't be possible for you to qualify for a loan in order to purchase a mobile home. You should take steps to improve your score and then apply for a loan.
Hi. I'm try'n to get a loan for a home that I have been living in for the past 2 years. I have been making the payments on time. but my credit score is 566. I have a gov. job. I need help!!!
What is the best, where is the best place to finance an older mobil home on lot year 1976?
what is a permanent foundation on a mobile home considered?
Hi timmy,
You can check out the permanent foundation guide regarding manufactured homes/mobile homes from the given page:
"http://www.hud.gov/offices/adm/hudclips/guidebooks/4930.3G/index.cfm"
Thanks
You can check out the permanent foundation guide regarding manufactured homes/mobile homes from the given page:
"http://www.hud.gov/offices/adm/hudclips/guidebooks/4930.3G/index.cfm"
Thanks
I am considering buying a place that I now rent. It is 1.24 acres with an old trailer on it, I want to buy this place but I want to put a newer mobile home on it, sell the old one. The owner is willing to do owner finance with me, my question is: Can I purchase this place and a new mobile home in one transaction or do I purchase the land and then a mobile home? Not sure how this works. Will be a first time home buyer.
Hi msaklady,
As far as I know, you'll be able to purchase the land as well as the mobile home in one transaction.
Take care.
As far as I know, you'll be able to purchase the land as well as the mobile home in one transaction.
Take care.
I need to find financing so I can sell this mobile home and property in Stella, NC. Most banks are not giving mortgages out for this type of property. The mobile home is considered real estate, not personal property. What type of financing is available to people for this package.
we are looking to purchase a manufactured home on a lot. I've spoken to a few other lenders and am finding that the cost of the loan (lender fees around 1000 and title and escrow fees around 1300) is more than I expected. By the time you add of one year insurance and pro rated taxes I'm looking at 4,000-5000. Is that normal?
Hi Rene,
If you're not getting loans from conventional lenders, then you can contact the lenders offering personal property loans and take out a mortgage on the property. However, such loans are available at a higher interest rate.
To ssb,
The closing costs may vary from state. If most of the lenders are offering you similar closing costs for the loan, then you'll have to go with them.
If you're not getting loans from conventional lenders, then you can contact the lenders offering personal property loans and take out a mortgage on the property. However, such loans are available at a higher interest rate.
To ssb,
The closing costs may vary from state. If most of the lenders are offering you similar closing costs for the loan, then you'll have to go with them.
If I have challenged credit with a short sale last summer how soon before I will be able 2 qualify for a loan?
If I have challenged credit with a short sale last summer how soon will i be able 2 qualify for a loan?
Hello,
I am attempting to inquire about a mobile home loan. My girlfriend and I recently went to look at a great 3 br, 2 full bath mobile home. It is located in a park, or on rented land, and the price is $35,000. She is about to finish up with college and we both believe it would be a great starter home. One thing is really holding us back though....I have no credit history. I have worked for a company for 3 years now and I make about 24,000 a year and she makes about 20,000 a year. Is there any options for us? (we may also be able to get a family member to co-sign)
I am attempting to inquire about a mobile home loan. My girlfriend and I recently went to look at a great 3 br, 2 full bath mobile home. It is located in a park, or on rented land, and the price is $35,000. She is about to finish up with college and we both believe it would be a great starter home. One thing is really holding us back though....I have no credit history. I have worked for a company for 3 years now and I make about 24,000 a year and she makes about 20,000 a year. Is there any options for us? (we may also be able to get a family member to co-sign)