Appraisal

What It Is

Manufactured home appraisals or property valuations are the process of determining the market value of a manufactured home. Appraisal reports are used in manufactured home loans. Appraisals are most frequently used in purchases and sales of manufactured homes but are also commonly used in refinances.

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Why We Need It

Appraisal reports are used in mortgage loans, settling estates, establishing a sale price, and taxation. The amount the manufactured home is estimated to be worth by an appraiser’s physical inspection of the home. This value affects the loan amount our underwriters approve the buyer(s) for. An appraisal also gives the homeowner a good estimation of the value of their home. In the case of purchases and sales, the appraisal is used to determine that the home’s contract price is correct given the location, condition, and features. For refinance cases, the appraisal assures the lender that the amount being loaned is not greater than the home’s value.

What We Look At

An appraisal review checks that the personal information and home information is correct on the documents as well as basic items about comparable sales. Appraisal value is calculated using comparable sales from the last six months in the park or community and takes into account physical aspects of the home. An appraiser will evaluate all aspects of the home and considers the age, location, quality, square footage, number of rooms, etc. of the home and creates an appraisal value from this information. Anything added to the home such as carpets, porches, awnings, air conditioning, etc. are all taken into account in the appraisal report.

Approval Documents

  • Estimated closing statement from escrow

Provided by escrow, outlines all cost for the buyer and seller. Determines the total cash to close for the buyer.

  • One year insurance showing year, make, model, size and complete serial number of home. Also need lender to show as loss payee

Santiago Financial, Inc. has manufactured home insurance in-house for competitive rates. However, the buyer is not required to obtain insurance through Santiago Financial, Inc. but is required by law to obtain a one year policy on the home purchased. If the buyer chooses to proceed with the insurance Santiago Financial, Inc. offers, they have the option to finance the first year’s premium (depending on lender approval). Triad and CU will not finance closing costs normally.

  • Signed and Completed Santiago Credit App

Using the information provided from your initial Credit Application, Santiago Financial will generate a Uniform Residential Loan Application, also known as the 1003, for you to initial and sign.

  • Copy of Driver License
  • Copy of Social Security Card
  • Mortgage Loan Origination Agreement

Agreement of the mortgage loan origination and written acknowledgment that Santiago Financial, Inc. is the broker. The borrower(s) complete the bottom section acknowledging this information.

  • Purchase Agreement (signed by buyer & seller – no digital signatures)

Used to finalize the interest of both buyer and seller in the sale of the manufactured home.

  • Copy of Listing Agreement (only if home is listed by a mobile home dealer)

A contract between the broker and the owner of the manufactured home (mobile home dealer) granting the broker the authority to act as the owner’s agent in the sale of the property

  • Verification of Income – 2 most recent year to date paycheck stubs

The broker and lender need to verify the buyer(s) income amount(s) to be able to approve of a loan. This is because we must verify that the buyer(s) can pay the loan back.

  • Last two years W-2s

Used to determine a 2 year average. If there is a decrease in annual income, then the buyer will be required to provide a Letter of Explanation to clarify the reason for the decrease.

  • Verification of Employment – Santiago Financial to obtain

Santiago Financial must verify that the buyer(s) work at their stated jobs to clear income. They must also obtain verifications from all locations that the buyer(s) have been employed for the last 2 years. Borrower Signature Authorization Form is required to obtain any verifications.

  • Two Years Tax Return – Federal only – all Schedules

Used to clear income is a buyer is self-employed or receives a 1099

  • Source of Down Payment – 3 months complete bank statements showing entire down payment in customer`s account

Buyer(s) must prove that the entire balance of the down payment in their account for 90 days prior to the closing of the loan. If the down payment is a gift, the gifter must provide these documents, as well as a gift letter. All large deposits must be sourced.

  • Proof home sold and mortgage paid in full (if applicable)
  • Park Approval/Lease showing manager signature, space rent, and park phone number

Document that shows that the buyers are permitted to live in the mobile home park, verifies space rent amount, and is signed by the park manager.

  • Invoices (New Home)

Copies of the manufacturer’s invoices are used to determine the value of the home and final loan amount.

  • Appraisal

The amount the home is estimated to be worth by an appraiser’s physical inspection of the home. It is calculated using comparable sales for the last six months in the park or community and takes into account physical aspects of the home. This value affects the loan amount our lenders approve the buyer(s) for.

  • Copy of Title – Title Search – MCO

A document Escrow requests from the state to obtain all home information and to verify if their are any current liens against the property

  • Person to Person Seller Interview

Form to be completed with the sellers information in case of title transfer issues. Two different phone numbers are required.

  • Retailer Disclosure Form

Form to be completed by dealer selling a New home.

  • Escrow Instructions
  • Borrower Signature Form

The borrower(s) completes this form giving us authority to obtain employment information. The form includes a release of the buyer(s) signatures and  the buyer and co-buyer’s signatures.

  • Verification of Rent (if applicable)

Cancelled for the requested number of months or a letter from the landlord

  • Signed and Completed 4506 Form

The lender can request an electronic transcript of the buyers tax returns directly from the IRS to verify income. Borrower must complete entire top portion, sign, and date.

  • Auto Draft (Voided Check)
  • Loan Estimate

This document lists basic information about the estimated terms of the mortgage loan. Please note, the terms found on the Loan Estimate are only estimates.

  • Signed Broker Disclosure

A written explanation, to be signed by the buyer(s), explaining to the buyer the role that the broker plays in the transaction. Also states the fee that Santiago Financial is charging for their services.

  • Signed Appraisal Acknowledgment

This form will be sent to the buyer along with a copy of the appraisal report acknowledging the borrower(s) were provided a copy of the appraisal.

  • Tax & Insurance impounds required

An account managed by a third-party, typically a loan servicer, to collect and disburse funds on behalf of the homeowner and lender.

Manufactured Home Advantages

Cost

The cost of manufactured homes on average is less than traditional homes. Often times, the mortgage and space rent for a manufactured home is even less than renting an apartment or condominium in California. According to Zillow, the median (traditional) home value in California is $487,700. Manufactured homes cost a fraction of this price for just as much space as a traditional home and much more space than an apartment or condominium.

Customization

Many manufacturers allow customization on the layout and design of a new manufactured home. Because manufactured homes are modular (have multiple pieces that are manufactured at a factory and brought to the space), a customer has more freedom to customize than if they were to buy a traditional home that was built on-site.

Community

Manufactured homes in mobile home parks can provide a great sense of community. Afterall, a mobile home park is a community of residents that often share common facilities (pool, club house, etc). This type of neighborhood relationship is unique to private communities and manufactured homes make this type of community much more affordable and attainable.

Improvements

Many manufactured homes found for sale in parks have renovated living spaces and kitchens. These improvements are comparable to that of the comforts of a traditional home.

Location

A manufactured home can be placed just about anywhere (given the proper legal and safety constraints), whether in a park or on owned land, giving the customer full freedom to choose where they want to live. There are mobile home parks throughout California and a customer can find the location that is perfect for their budget and lifestyle.

Ownership

Manufactured homes make homeownership affordable and accessible. For residents who have previously only been able to rent apartments and condominiums, this means that the monthly amount spent on housing will now go toward owning your own home. Homeownership has never been more in reach!

Space

A manufactured home is much larger than an apartment or condominium with the same monthly payment on average. A single wide manufactured home is generally around 1,000 square feet, while a double wide can be as large as 2,300 square feet for the same or a fraction of the monthly payment on an apartment or condominium.

Overall Processing Timeline

Apply using the Santiago Financial, Inc. Credit Application online, by email or by fax, or by phone.

Once approved, Santiago Financial will send the agent and buyer an approval package with the list of conditions including the forms Borrower Signature Authorization (BSA), Mortgage Loan Origination Agreement (MLOA), Park Approval, Appraisal Acknowledgement, Purchase Order, Request for Tax Transcripts (4506-T), and 1003 Credit Application. Once received, the forms are to be filled out by the buyer and co-buyer and returned to the Processor.

Next, escrow will be opened and the buyer will make an initial deposit that is considered a portion of the total down payment.

Once we receive the completed documents, the Processor will clear the buyer and co-buyer’s incomes using the requested conditions. An appraisal (COD) is also required prior to order loan documents and will take approximately 1-2 weeks to complete and have our lenders review.

Additionally, Santiago Financial, Inc. has manufactured home insurance in-house for competitive rates. However, the buyer is not required to obtain insurance through Santiago Financial, Inc. but is required by law to obtain a one year policy on the home purchased. If the buyer chooses to proceed with the insurance Santiago Financial, Inc. offers, they have the option to finance the first year’s premium (depending on lender approval). Triad and CU will not finance closing costs normally.

Once all the conditions have been met, the Processor will order loan documents, which will take approximately four days for the lenders to create and send to escrow. The buyer will be notified to contact escrow to schedule an appointment to sign. Escrow overnights the loan documents back to the lender. If required, the Processor will advise the buyer to call for their post-doc interview with the Lender. The loan normally funds approximately four business days after document signing. Upon receipt of funds, escrow is able to close and the buyer is given possession of their new home.

Glossary

Appraisal: The amount the home is estimated to be worth by an appraiser’s physical inspection of the home. It is calculated using comparable sales for the last six months in the park or community and takes into account physical aspects of the home. This value affects the loan amount our lenders approve the buyer(s) for.

Approval Acknowledgement: This form will be sent to the buyer along with a copy of the appraisal report acknowledging buyer was provided a copy of the appraisal.

Approval Package: Once approved, the buyer and agent (if applicable) will receive an Approval Package containing forms to fill out and return to your processor. These include Borrower Signature Authorization (BSA), Mortgage Loan Origination Agreement (MLOA), Park Approval, Person to Person Seller Interview, Approval Acknowledgement, Purchase Order, and Request for tax transcript (4506-T).

Balance Sheet: Must be completed for all self employed or 1099 paid employees

Bankruptcy: can affect a buyer’s ability to obtain a manufactured home loan for 7 to 10 years from the date discharged. Affects down payment requirement.

Borrower: The applicant (“buyer”) of the manufactured home loan.

Borrower Signature Authorization (BSA): Borrower completes this form giving us authority to obtain employment information

Broker: The firm that goes between the customer/agent and the lender to aid a timely loan application to funding process. Santiago Financial, Inc. is your broker.

Buyer’s agent: Real estate professional or Mobile Home Dealer who represents the buyer throughout the transaction.

Buy for: You can have a relative or friend buy the home you want for you if they have better credit than you or have a better chance of getting approved. This means that the loan and title will be in their name, but you can decide on a payment transfer plan with the purchaser where you gift the monthly payment money to them and they pass it on to the lender. The buyer must be a homeowner prior to the application for the loan and the minimum down payment is 20% of the sales price. Additionally, a 1003 form must be filled out with the information of the occupants.The park management must approve of the Buy For.

Cash out refinance:  Taking equity from your home in the form of cash for the purpose of home improvements, as well as other uses as permitted by the lender. To be approved for a cash out refinance, the customer must have a 700+ FICO score. The limit is $25,000.

Cash to Close: The total amount that the buyer must bring in of their own down payment for the loan to fund. I.e., down payment, all non financed closing cost.

Chattel Loan (Consumer Loan): A manufactured home loan in a rental or lease manufactured home park.

Clear title: Title to a home that does not have any liens against it.

Co-buyer: An additional buyer of the home, in some cases there can be multiple co-buyers. A cosigner is not the same as a co-buyer. A co-buyer assumes equal financial responsibility for the loan and is required to live in the home. Whereas a co-signer is simply on the loan as collateral.

Comparable Sales Report Request: Request for comparable sales report in a specific park or area.

Co-Signer: Does not live in the home. Is only allowed if the buyer has zero or limited credit history. Both Buyer and Co-Signer must qualify for the payment on their own.

Co-op park: A type of park that involves group ownership and shares. All members of the community own both their house and a share of the assets of that community. We can only lend in a Co-Op if the community is willing to list the lender 1st on the share.

Counter offer: Sometimes the lender will respond to a buyer’s application with a counter-offer. This means that the lender is willing to lend to the buyer, but with a different amount or with changes to conditions. Once received, Santiago Financial will inform the buyer or agent. If the buyer accepts the counter-offer, a relook will be sent to the lender accepting the offer. The lender will send the approval information within 24 to 48 hours, excluding weekends and holidays.

Credit Report: A record of how an individual has paid back credit in the past. Used to show a customer’s creditworthiness.

Credit/FICO Score: A numerical score derived from a person’s credit report that is used by lenders and brokers as an indication of how likely a customer is to pay back a loan.

Debt consolidation refinance: Debt consolidation refinances is using the equity of your home to create one payment of debts rather than multiple. For example, if you have three credit cards with $8,000 on each, a debt consolidation would group them together to be a $24,000 debt, with one payment proportionate to the debt. Customers will be asked which debts they wish to consolidate early in the application process.

Debt to income ratio (DTI): A comparison of current debt payments and proposed home purchase compared to the buyer’s income (bills, loan payments, child support, alimony, etc) to help determine an applicant’s loan qualification.

Employment History Form: To be completed if the buyer(s) have fewer than two years on a single job or if they are using overtime pay to qualify the buyer(s).

Escrow: An escrow company is a neutral third party between the buyer and seller that mediates the money involved in the sale of a home. Escrow is the time period between the signing of the purchase agreement and the loan closing.

Estimated Closing Statement: Provided by escrow, outlines all cost for the buyer and seller. Determines the total cash to close for the buyer.

Gift Letter: If any portion of the down payment is a gift, the “gifter” is required to complete, sign, and date this form.

Housing Ratio: A comparison of the estimated monthly mortgage payment and any space rent/HOA fees to the buyer’s income expressed as a percentage.

HUD: Manufactured home built after June 13, 1976.

Insurance Quote Request: Request for an insurance quote on a specific home

ITIN Number: a number supplied by the Federal government to non-citizens in lieu of a Social Security number for the sole purpose of the filing taxes with IRS. In order to use an ITIN to obtain a manufactured home loan the same number must be reflected on all income documents (paystubs, W2’s, tax returns, etc.).

Land/Home combination: Financing a piece of land and a manufactured home in one mortgage.

Loan Term: The number of expected payments to be made throughout the length of the loan.

Mortgage Loan Origination Agreement (MLOA): Borrower completes bottom section acknowledging that Santiago Financial, Inc. is their broker

Park Approval: Written confirmation that borrower is approved to live in the park. The form is to be given to and completed by the park manager.

Person to Person Seller Interview: To be completed by the seller or their agent. The entire top portion is required and must include two phone numbers.

Points: 1 point is equivalent to 1 percent of the loan amount

Pre-approval: Conditional approval that our lender will loan a potential buyer a fixed dollar amount as long as the home is purchased before the pre-approval document expires, the home appraises around the correct sales price, the income verifies as stated on the application, and all conditions are met.

Pre-HUD: Manufactured home built before June 13, 1976. Requires 20-25% for down payment.

Prepayment Penalty: A charge to the buyer if the loan is paid prior to meeting their full term.

Profit and Loss: Must be completed for all self-employed or 1099 paid employees.

Purchase Order: The contract between buyer and seller for the manufactured home transaction. Usually this form is only used when there is not an agent involved in the transaction.

Rate term refinance: A rate term refinance means that the lender will give you a different interest rate, term, or both, depending on what is requested. It can be provided for up to 95% of the original sales price or appraised value, whichever is less. Just the same as purchases, rates cannot be guaranteed by the broker (Santiago Financial), and is up to the discretion of the lender.

Request for Tax Transcripts 4506-T: The lender can request an electronic transcript of the buyers tax returns directly from the IRS to verify income. Borrower must complete entire top portion, sign, and date.

Retailer Disclosure: Form to be completed by dealer selling a New home.

Tax and Insurance Impounds: A percentage of the annual insurance premium and property taxes that the lender collects each month, held in a trust account to be used towards the following and/or future annual payments.

Title Search: A document Escrow request from the state to obtain all home information and to verify if their are any current liens against the property.

W-9: In case the borrower has lost their Social Security Card, this is to be completed and signed. This form can be used as a substitute

 

Approval

Once your Santiago Financial Credit Application is received, it will be submitted to our lenders by a loan processing assistant. The lenders send Santiago Financial the loan decision between 24 and 48 hours after it is submitted to them, excluding weekends and holidays. The decision will then be shared with the buyer(s) and agent, if applicable.

Counter offer

Sometimes the lender will respond to a buyer’s application with a counter-offer. This means that the lender is willing to lend to the buyer, but with a different amount or with changes to conditions. Once received, Santiago Financial will inform the buyer or agent (if applicable). From that point, if the buyer accepts the counter-offer, a relook will be sent to the lender accepting the offer. The lender will send the approval information within 24 to 48 hours, excluding weekends and holidays.

Relook

A relook is a document that is submitted when terms of the application have changed, such as loan amount, down payment amount, and adding or removing an applicant, etc. It is processed the same way as the Santiago Financial Credit Application by the lender, so a decision for a relook also takes 24 to 48 hours, excluding weekends and holidays.

No Pre-Payment Penalty

A buyer is not penalized if they pay off the loan before the full length of the given term.

Types of Manufactured Home Loans

Purchase

A purchase loan is for applicants looking to buy a new home. The loan can be for just the home, or for the home and the land (land-home). To get started, apply now for pre-approval!

Gifted Down

You can have the down payment for your home given to you as a gift by a family member or friend, as long as there is no condition of the gift being paid back. Documents required for gifted down payment: source of down payment (3 months of bank statements from all bank accounts the funds are coming from), statement from gifter, and copy of transfer (cancelled check, escrow deposits, teller receipt, etc.)

Buy-For

You can have a relative or friend buy the home you want for you if they have better credit than you or have a better chance of getting approved. This means that the loan and title will be in their name, but you can decide on a payment transfer plan with the purchaser where you gift the monthly payment money to them and they pass it on to the lender. The buyer must be a homeowner prior to the application for the loan and the minimum down payment is 20% of the sales price. Additionally, a 1003 form must be filled out with the information of the occupants.

Refinance

A refinance loan is for customers who already own a manufactured home and want to change their rate or term, consolidate debt, or take cash from their equity for home projects.

Rate Term

A rate term refinance means that the lender will give you a different interest rate, term, or both, depending on what is requested. It can be provided for up to 85% of the original sales price or appraised value, whichever is less. Just the same as purchases, rates cannot be guaranteed by the broker (Santiago Financial), and is up to the discretion of the lender.

Debt Consolidation

Debt consolidation refinances is using the equity of your home to create one payment of debts rather than multiple. For example, if you have three credit cards with $500 on each, a debt consolidation would group them together to be a $1,500 debt, with one payment proportionate to the debt. Customers will be asked which debts they wish to consolidate early in the application process. To be approved for a debt consolidation refinance, the customer must have a 700+ FICO score. The limit is $25,000.

Cash Out

Cash out refinance means taking equity from your home for cash for the purpose of home improvements, as well as other uses as permitted by the lender. To be approved for a cash out refinance, the customer must have a 700+ FICO score. The limit is $25,000.

Necessary Application Information

Below is all the necessary information for your credit application. It is important to complete the application to the best of your ability to receive approval as soon as possible.

  1. Profile Information
    1. Full Name
    2. Social Security Number/ITIN (same # used on W2s as well as taxes)
    3. Date of Birth
    4. Marital Status
    5. Phone Number
    6. Email Address (optional, but recommended)
    7. Current Residence Information
      1. Residence address
      2. Current resident date (move-in date)
      3. Payment type (rent, own, family member, other)
      4. Payment amount
    8. Previous Residence Information (only required if buyer has been living at their current residence less than two full years)
      1. Previous resident address
      2. Previous resident dates (move-in and move-out dates)
      3. Payment type (rent, own, family member, other)
      4. Payment amount
    9. Number of dependents and ages
    10. Gender
    11. Race and ethnicity
    12. Child support/Alimony Obligations
  2. Employment Information
    1. Present Employment
      1. Name of Employer
      2. Start date
      3. Address (optional)
      4. Monthly Income
      5. Occupation
      6. Phone Number
    2. Previous Employment (only required if buyer has been working at their current employment less than two full years)
      1. Name of Employer
      2. Start date
      3. Address (optional)
      4. Monthly Income
      5. Occupation
      6. Phone Number
    3. Other sources of income (Social Security, Permanent Disability, VA Benefits, Court Ordered Child Support, Rental Income, etc)
      1. Name of Other Source
      2. How long have you been receiving this income?
      3. Monthly Income Amount
  3. Home Information (not required if you are applying for a Pre-Approval)
    1. Is your home in a park or is it land home?
    2. If park, park name and space number
    3. Year
    4. Make
    5. Model (optional)
    6. Dimensions
    7. Decal (optional)
    8. Space rent amount/HOA Fee
    9. Source of Down Payment (savings, 401k, gift, cash at home)
    10. Seller contact information (optional if home is used)
    11. Dealer information (required for new homes)
    12. Manufacturer Invoice (required for all new homes)
  4. Sales Information
    1. Sales price
    2. Down payment amount
      1. Minimum is 5% of the sales price
      2. Minimum is 20% for all homes built prior to June 13, 1976
  5. Agent Information (if any)

Application Timeline

Before Applying

The only document we need before your loan approval is our completed credit application. Make sure all of the necessary information is completed for each buyer.

Day 1

Complete our credit application online, or fill out a printed copy of our credit application. If you completed a printed application, please email or fax it back to our office for initial processing. Incomplete information will delay your loan process. We will contact you if there is any missing information. Day one… your loan has been submitted to lenders.

Day 2 – Day 3

We will receive a loan decision (approval, denial, counter offer) from lenders and we will contact you. If approved, we will send you an approval package that includes a list of the necessary documents we need to fund your loan. If you receive a counter offer, our office will contact you to see if you want to accept the counter-offer. After a counter offer is accepted, a relook for your application will be sent to the lender accepting the counter-offer. Our office will receive an approval within 24-48 hours (business days).

Congratulations!

You are on you way to becoming a homeowner. We will work with you through the entire loan process to make it as smooth as possible. We are here to work for you.