Manufactured Home Loans

Given the current economy, there is a lot to consider surrounding homeownership for the average person. Though some people set their sights on more costly properties, manufactured homes are becoming an excellent way to find nice, affordable housing. Now, more than ever, this kind of housing is growing in popularity, but it does raise new questions.

Since manufactured homes do operate a bit differently than traditional housing opportunities, many people are left wondering what the purchase of such a home might look like. A commonly mistaken belief is that you must buy these homes outright and cannot get a loan for them. This couldn’t be further from the truth. In fact, there are plenty of options when it comes to manufactured home loans. In this article, we will explore these homes and what manufactured home loans look like.

Understanding Manufactured Homes

A manufactured home is a small home setup that is, more often than not, constructed in a factory and then delivered to a set location. Since these homes are created at a completely separate location, they are unique because they are not built on the ground like traditional homes or modular homes. These pre-built homes are the modern evolution of mobile homes, and you might be surprised at the improvements that have been made in recent years. In fact, some of them are nearly indistinguishable from other small home options.

 

Despite their traditional mobile home ancestry, manufactured homes are perfectly modeled after traditional homes. In some instances, they are completely indistinguishable from traditional homes. From an external perspective, these homes are merely built as smaller variations of any other home option. The safety requirements and building requirements for these homes, as dictated by HUD code, are designed to make them viable homes that are a substantial improvement from the original designs of the mobile homes that preceded them. In fact, these homes are completely in-line with traditional home designs with a few understandable variations. 

The Benefits of Investing in a Manufactured Home

Manufactured homes can come with a wide range of benefits, particularly for a family on a budget. The first and most obvious benefit of investing in a manufactured home is the fact that it is much cheaper than other home options. In fact, you can get an entire manufactured home for cheaper than most condos. Compared to a traditional home, the price can be a third or less of what you would expect to pay with other home types. These smart investments can give you the comfort of your own living quarters without absolutely breaking the bank, and they are known to come in all different sizes.

 

Manufactured homes can be added to entire neighborhoods with similar homes. Many of them are quite nice and come with exciting perks. Locating a nice neighborhood for your manufactured homes can come with a wide variety of benefits, just like traditional neighborhood options. Some of them are known to have HOAs, pools, and even community halls. These elements can come together to offer you an affordable house with a lovely area to live as well.

 

A major point of convenience and interest with manufactured homes is that they can be moved, much like mobile homes. Though moving these homes does require a bit of work with professionals, it does make it possible for you to easily transfer your home to a new location whether it is across the city or across the country. At the end of the day, it allows you to pack up your home and take it anywhere rather than focusing on selling your home and acquiring a new one for a big move. It gives your family the convenience of relocating. However, it should be noted that this does change the kind of loans that are available if you choose to relocate.

Manufactured Home Requirements

The changes in the building style are what separate manufactured homes from mobile homes, and they are why it is possible to get a loan today. More importantly, building codes make it possible for you to feel safe and secure in your investment. You want a home that is safe for your family, built to last, and worth the investment. These HUD codes are what make it possible.

HUD Code Overview:

  • All manufactured homes must meet strict requirements regarding the safety, durability, quality, and design of the home.
  • All manufactured homes are required to meet energy efficiency standards to ensure a reasonable cost for homeowners, as well as a reasonable environmental impact per current standards.
  • The homes must be built using steel specifically for the beams to ensure longevity and resiliency.
  • All homes must be built in three or fewer sections and must be completely put together and built prior to delivering the new home to the predetermined location. 
  • All manufactured homes must meet key standards regarding basic amenities, including but not limited to electrical, plumbing, heating and cooling, and HVAC systems.

These codes come together to make manufactured homes operational and secure in the same way that traditional homes are. Since these codes are in place, you can feel comfortable knowing that they are perfect for you and your family to live a comfortable and happy life at an affordable cost that won’t empty your wallet.

The Confusion Surrounding Manufactured Home Loans

As we have mentioned, manufactured homes are a new and improved version of mobile homes. However, very few people understand the difference. This has led to a lot of confusion around manufactured home loans because, historically, it was difficult to get a loan on the mobile homes that these have replaced. This was in part because of their often faulty design and also because of the very nature of the homes since they are not attached to the property. 

Since mobile homes were known to be difficult to acquire a loan for, a belief has been passed that manufactured home loans come with similar problems. This is not the case. First, it is important to remember that despite the similarities in concept, manufactured homes are not mobile homes. This is because of the new codes put in place to govern their overall design. The changes that have been made have now made it easier than ever to get manufactured home loans. With these simple changes, homeowners have been given more flexibility with their loans, as well as their purchases.

Manufactured Home Loans and Property

When you purchase a traditional home, you are also purchasing the ground that the home sits on. Though home rental options permit you to simply rent the house without actually owning the property itself, when you purchase a new home, you can count on the fact that you are also getting the property with it. Since manufactured homes exist independently of their property, the two do not always go hand-in-hand. 

 

A common belief is that in order to secure a home loan for your manufactured home, you have to own the property. This is another point of confusion that actively limits the options that are in place. As a manufactured homeowner, you are able to receive a manufactured home loan regardless of whether or not you have possession of the property. 

 

For some homeowners, this is a really beneficial set of options to have. It means that you can either obtain a loan for a home on your own property, or you can obtain a home for the property that you intend to lease. Either way, it means that you have more options and a chance for further short-term savings when you pursue financing your very own manufactured home.

The Problem With Manufactured Home Loans

Though you can obtain manufactured home loans, there are some issues that may arise depending on your circumstances. On one hand, there are many requirements that the home must meet in order to qualify for a traditional FHA loan. On the other hand, loans that fall out of that qualification can be less favorable for some buyers. 

 

An area of particular concern depending on where you fall in these qualifications is the fact that many places don’t like to give out loans for smaller amounts, particularly under $50,000 in nature. This is because there is no real money to make off of them. Though this might cause problems, it doesn’t mean it can’t be done. It simply means that you might need to shop around. 

 

Ultimately, the type of loan that you pursue will determine a lot about how much your payments are, as well as how much you end up paying in interest. Some manufactured homes can only qualify for a personal loan rather than a traditional home loan. More often than not, this occurs when an individual home doesn’t meet the requirements for a traditional FHA loan. Additionally, some companies known for creating manufactured homes will offer their own loans to the interested buyer. Ultimately, you might find yourself paying more than you would with an FHA loan, but it is helpful to have the option.

FHA Loans and Manufactured Homes

The FHA, also known as the Federal Housing Administration, is a group that works hard to secure your access to conventional home loans. By working with this administration, you gain access to a wide range of lenders to help you secure a home loan for your manufactured home.

 

When you pursue a loan with the FHA, you will find that there are two real options. Either you will obtain a traditional loan comparable to what you would expect from normal housing, or you will invest in what is known as a title loan. The difference here is primarily whether or not you own the property. If you do not, a title loan is what you can expect.

 

Whether you go with a title loan or a traditional loan, it is important to remember that each loan will have its own requirements. These requirements can determine whether or not you or your manufactured home are qualified to receive the loan in question. Though the different loan types and lenders come with different requirements, there are a few consistencies among the loan requests.

Common Loan Requirements:

  • The manufactured home must be a minimum of 400 square feet.
  • The home must be permanently connected to the property in some way that meets the required standards.
  • The home cannot be moved after it has been attached to the property.
  • The manufactured home must be newly built within a certain timeframe.
  • There must be a certificate that shows that the manufactured home meets certain HUD code requirements.

Depending on the lender that you are working with, you might find that they have additional requirements or force certain limitations on the buyer surrounding price and the terms of the lease. Ultimately, these are requirements that you will work through when it comes time to actually obtain the loan.

What We Offer

At Santiago Financial, Inc., we believe in helping the consumer make an educated choice. We understand the process and assist them from beginning to end. With over thirty years of experience, Santiago Financial, Inc. provides world-class service in all facets of manufactured home lending, offering assistance to one customer at a time.

 

Our team is a trusted source regardless of whether you are buying, selling, or refinancing. We have serviced consumers in Los Angeles County, Orange Couty, and adjacent areas. Consumers refer to our services to make the processes involved in manufactured home lending, mobile mortgage lending, and manufactured home financing that much easier.

 

We have free consultations available and can provide you with a decision in 24-48 business hours.

 

Give us a call at 800-232-3908 or email us at info@santiagofinancial.com

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