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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 Guest,

You will have to contact the local lenders and apply for a mortgage. The lender will check your situation and let you know whether or not you can qualify for a mortgage. This community has a large number of lenders. You can seek a no obligation free mortgage quote from them and check out if they can help you with a loan.
Posted on: 30th Jul, 2011 12:15 am
i am trying to see what my wife and i need to do about purchasing a 2000 reman mobil home that is a 5 bed 3 bath approx 2128 sqfeet setting on 7 acres in west odessa texas for $130,000
Posted on: 11th Aug, 2011 07:10 am
Hi chilton!

Welcome to forums!

You should contact the local mobile home loan lenders and apply for the loan. You should have a good credit score of around 700-720 in order to qualify for the mortgage. Apart from that, you should also have a good income. If you meet these two criteria, you will be able to qualify for a mortgage.

Feel free to ask if you've further queries.

Sussane
Posted on: 11th Aug, 2011 08:25 pm
Hello, I'm a bit confused as to what "permanent foundation" is. We are looking into purchasing a single-wide (approx. 900 sq.feet) trailer house and put it in my wif land. My question is, since I can get the house without the loan, do I prepare the ground for the house and then apply for a loan? The house is down in OK and thdeliver it to MO once the site is ready. Does the "ground"(foundation) need to be permanent? (poured councrete foundation etc.) Can someone please clarify?
Thanks,
Posted on: 12th Aug, 2011 11:14 am
Hi Oz,

You can check out the given pages in order to find out all the information related to permanent foundation for manufactured homes:
"http://www.huduser.org/Publications/pdf/foundation_guide_complete.pdf"
"http://www.underpressureco.com/id64.html".

Thanks
Posted on: 12th Aug, 2011 10:07 pm
Yes, Oz...permanent means just that...permanent, so a poured concrete foundation would do the trick. One caveat, though - contact your lender and ask them for a specific definition of what they want you to do. After all, that's where the money is going to come from for your loan...not me.
Posted on: 21st Aug, 2011 02:48 pm
Want to buy a 1979 Titan mobile home .960 sq ft. It is in a mobile home park at Lake Onota Village in Pittsfield, Ma. Sale price $33,500.00. everywhere is requiring 20% down. any ideas?
Posted on: 24th Aug, 2011 07:58 am
Hi guba,

It is true that lenders will be requiring 20% down payment if your wish to take out a conventional mobile home loan. You should contact your local lender and apply for a loan. If you meet all the required criteria of the lender, then you will get the mobile home loan.
Posted on: 24th Aug, 2011 10:16 pm
I am trying to sell my mobile home. I have a buyer (first-time) who made an offer but cannot find a bank to make the loan since the mobile home is not on a permanent foundation. My mobile home has an attatched sunroom and 2 car garage and sits on 1 acre. I was reading about the State and Federal programs. Do you think that would be an option for them and if so, how do I or they contact them? Thank you.
Posted on: 01st Sep, 2011 02:14 pm
Hi Tammyl,

It is true that if the property does not have a permanent foundation, it will be difficult for anyone to get a mobile home loan. In such a situation, it will be better if those who are buying the property could go for personal property loans.

Thanks
Posted on: 01st Sep, 2011 09:05 pm
i am looking to refinance my dbl wide mobile home that is on my property deeded to me i'm have gone through a divores and need to take my ex off the mortgage i do have someone that will go on the loan with me our debt to income is around 51% and our credit scores are 750 what are my opp.
Posted on: 07th Oct, 2011 08:15 am
Posted on: 07th Oct, 2011 10:39 pm
We have an older mobile home that we own free and clear and we are sitting on a piece of land (1.5 acres) the we have financed thru a bank. We would like to buy a new double wide. I am wondering what type of loan we need to get to cover the cost of the new home, a well, possible geothermal heating and also include the land. Our bank will not give loans on mobile homes so I am sure need one that will take on the land as well as the home. Our credit scores are in the 700's and we would like to borrow 80,000.00 plus the 25,000.00 still owed on our property. My husband is self emplyed and has been for 6 years.
Posted on: 11th Oct, 2011 08:28 am
Welcome TM,

You will have to contact the local mobile home loan lenders and apply for a mortgage. If you meet the required criteria of the lender, then you will be able to get qualified for a new mobile home loan.
Posted on: 11th Oct, 2011 10:09 pm
mobil home in monrovia for less than 25,000.00
Posted on: 17th Oct, 2011 11:55 am
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