12/26/2022
How to Finance Your Manufactured
TThe Mobile Home Dude
Buying with cash is an option for some, but for many or most buyers, financing is the way to go.
You’ll need to find a lender who will give you the money for the purchase, and you will pay the lender back over time with interest.
“Not all manufactured homes are considered real estate, “To be considered real estate, there must be property taxes on the asset.
Without a recorded title and plat, there are no property taxes, and is not considered real estate.”
Those differences matter when it comes to money. “There’s a difference in financing options for personal property versus real estate.”
So what kinds of loans are available to purchase manufactured homes?
I AM GLAD YOU ASKED.
a) Chattel (personal property) loans. These loans—the same type you might use to buy a boat or RV—tend to have higher rates than mortgages, but they may have lower upfront fees. The loan term is often from 10 to 20 years. You can get this type of loan from a variety of lenders.
b) Mortgages (real estate loans). In general, you can only qualify for a mortgage on a manufactured home if it is titled as real property (real estate) along with the land. However, if you can get one, a mortgage will give you better interest rates than property loans.
c) Government-backed financing. Some government programs meant to help families or individuals afford homes can be used for manufactured homes.
The Federal Housing Authority, while not a lender itself, ensures Title I loans are offered by approved lenders. These loans are particularly flexible, able to cover the home only, the land only, or both.
The USDA’s loans require no down payment and have lower interest rates and less restrictive income requirements than most loans.
VA-backed purchase loans can also be used to buy a manufactured home or a lot, and have no down payment in most cases and no need for private mortgage insurance (PMI).
Conforming loans from Fannie Mae (such as MH Advantage) and Freddie Mac (such as Home Possible) can, in many cases, be used to buy manufactured homes.
It may be convenient to finance through your dealer; often, they have relationships with lenders and will encourage you to use their loans.
Shopping around with banks and lenders, though, can net you lower interest rates and better terms—or at least make you a more informed buyer when you arrive at the dealership.
SSolitaire Homes of SA8475 highway 90 west
San Antonio, Texas 78227
RBI36611
830-264-8760
210-675-5041
[email protected]
