Manufactured Home Loans Just Got More Attractive
Buying a manufactured home using programs such as FHA, USDA, or the VA program has a multitude of great advantages. Programs up to 100% financing and no private mortgage insurance are available, with incredibly low rates.
In order for everything to be a smooth success on this particular type of property when paired with a Manufactured home loan, you need to know the banker, broker, loan officer, and for that matter, realtor and title company, are ALL well versed in closing Manufactured homes.
Choosing the wrong lender with little manufactured loan financing experience, could prove detrimental to your process.
Many clients that are looking to buy or refinance their loan apply at multiple banks who do not know how to properly get underwriter approval on these loans, or know the pitfalls required to successfully close.
Today’s manufactured homes are greatly improved, but not all lenders are the same. You may already know this by know since you're currently looking to get approved.
Mortgages For Manufactured Home Loans Require A Permanent Foundation, On Land You Own, NOT Lease.
Is this a Mortgage or Chattel Loan You May Really Need?
All traditional mortgage loan programs require the homeowner to affix their property to a permanent foundation. Doing so with a few extra steps, classifies the property to be taxed as true real estate property.
Mobile homes that are still affixed to the wheels, tongue, and axels, do not qualify as fixed real estate because you could move that property somewhere else. In this case you would be looking for a chattel loan, these are most commonly used in Mobile Home parks.
Manufactured Nationwide does not finance any property that is not considered permanent real estate, nor do we finance in mobile home parks. You will find this to be true for 99% of the lenders out there.
If you are looking specifically for a loan on a mobile home and you will be in a mobile home park, you may want to do a google search for "Chattel Loans", "Chattel Home Lenders", or "Chattel Loans Near Me".
This would ensure you are finding the right lender and not getting frustrated at traditional mortgage lenders turning you down.
How Much Do I Qualify For A Manufactured Home Loan?
Obviously, there are many factors to determine your exact loan amount, not including your personal payment threshold you've set in your mind.
But there are multiple programs that will let you go up to 100% Financing. For example, if you are a eligible veteran, or qualifying spouse of a veteran, you can get a full 100% loan to value on every program they offer.
VA Manufactured Home Loan Programs At 100%
Not only does the VA Manufactured Home Loans come with the lowest rates, they also have no PMI. Many local banks, credit unions, and even national lenders will avoid doing these loans at the full 100%, and many won't even offer financing on the homes.
Another advantage for Veterans that currently own a Manufactured Home with an existing VA loan, you qualify for the VA IRRL Streamline Refinance Loan. The IRRL stands for “interest rate reduction loan”, this program will assist you in lowering your rate from other non-advantageous loan programs.
If you're looking for cash from your equity, the VA Cash Out Refinance allows up to 100% with no questions asked on the use of funds. We even have the VA Construction Loan up to 100% for land and home rolled into one loan.
The 100% VA loan is designed to make your life easier, and you can use your VA benefits more than once. But if you aren't a Veteran, there are other programs you can qualify for.
Maybe Your Looking For A USDA Rural Development Manufactured Home Loan Program, We Offer Up To 100% For One Time Close Construction, Purchase, & Streamline Refinance.
If you are looking to buy, build, or refinance in a qualifying rural area in any one of all 50 states, and you aren't a veteran, than the USDA rural development loan for manufactured homes may be just what you are looking for.
Offering 100% on all purchase, construction, and *streamline assist refinance programs for qualifying existing manufactured homes, they have a lower PMI requirement than FHA. There is however some limitations on USDA, such as a more strict approval process from underwriting, additional foundation reports, and a different set of debt to income ratios than VA & FHA.
You will want to speak with your manufactured home lender to see why there may be cases to use USDA over FHA, or vice-versa. The USDA for example does not allow cash out on any of their loans currently, nor do they finance most used manufactured home properties.
There is however a Manufactured Home Pilot program allowing for some pre-owned manufactured homes to qualify, but you again, want to check with your banker on this program making the most sense for you.
FHA Manufactured Home Loan Programs Up To 96.5%
The most popular loan program used on manufactured homes is the FHA program, this is for any manufactured home client who is not a Veteran, nor in a qualifying USDA area. The FHA program carries rates lower than the majority of manufactured home lenders, even with the required PMI you will find lower payments.
What is best about FHA is their guidelines allowing for higher debt to income ratio qualifications. This means you can buy a larger home on less income and qualify in situations that may not allow you to qualify for a USDA loan. So even if a USDA loan isn't possible, you can supplement the FHA program and still come away with a dream loan and rate.
Conventional Manufactured Home Loans
Conventional home loans are available up to 80% with no PMI. So if you are looking to put down a sizable down payment then this would definitely be a program you want to explore. With competitive rates, cash-out programs, and of course no PMI under 80%, you can choose a myriad of Fixed Rate or Adjustable Rate options.
Checking Your Credit, Knowing Your Score, & More!
Before applying for a manufactured home, you will want to make sure your credit is clear of any issues that could stop you from your final approval. If you have bad credit and still looking for a manufactured home, your odds will be tougher.
The crucial part is to determine if there are any errors on your credit report, should this be the case we have proven professionals that can help fix this prior to you closing your loan.
The last thing you want to do is apply for a manufactured home loan with errors on your credit report, turn-downs from other banks will occur and further deteriorate your credit score. By learning what is on your credit, you can have a transparent conversation about your manufactured home loan and see if you can still qualify.
Every lender checks your credit documentation thoroughly, they will even do checks for tax liens, judgements or collections that may not show up on reports you pull from places like Credit Karma.
However, the bankers scoring formula will determine whether you will be approved for a loan or not from the inaccuracies, therefore knowledge is power. We have great success getting clients approved after bankruptcy, with old mortgage lates, and even on a case-by-case basis with credit scores down to 530.
Get Pre-Approved Before You Sign A Purchase Contract
An important tip is to receive pre-approval for your manufactured home loan amount, not only do most Real Estate agents require a pre-approval letter before you can start house hunting, but this will save incredible time in your search.
An FHA, USDA, or VA Loan Pre-Approval Letter for Manufactured Homes gives you the confidence to start house hunting, hence finding the best home in the market. It also gives the Real Estate Agent confidence you are working with a qualified lender.
Many agents will get scared of working with clients looking at Manufactured Homes because they know not ever bank will do these loans.
You will not only set their mind to ease, but the power you will have over others that do not have this letter means you can get the home when they may lose out.
Should I Get a Fixed or Adjustable Rate Loan for A Manufactured Loan?
Which do you prefer?
A fixed rate loan is going to be a bit higher than an Adjustable Rate Mortgage (ARM), whereas an ARM can start out lower for a period of time and then adjust up.
Keep in mind, the last 15 years we have had near record low rates, and you may have already heard and seen the rate increases are coming and in force. The rates will rise and so if you only plan to be in your home for 5 years or less, then you may consider the adjustable.
Also, when rates increase, mortgage payments increase, and when both go up, that usually impacts the amount of home you can qualify for. The lower the rate and payment, the more house you can buy.
However, if you purchase your home with a low fixed rate now, you eliminate the payment adjusting out of control in the future. This is also helpful if you move away and decide to keep your property for a rental unit in the future.
Many Veterans we know that can go on deployment will rent their property out, they know the security of a fixed rate mortgage makes the most sense for them. The same holds true if you are relocated for a job, or loose your job entirely but still want to rent out the property.
While we do offer adjustable mortgage rates, we definitely will want you to know the options, and what could happen in the future. As volatile as rates are now, just take this into strong consideration when selecting a Fixed or Adjustable Rate mortgage.
What Are The Next Steps On How To Get A Manufactured Home Loan?
What you would want to do next is to locate a manufactured home lender whom will help you through this process. Times keep changing, everyday lenders, underwriters, and banks modify their guidelines. You want to be sure you are current.
At Manufactured Nationwide we pride ourselves in knowing each time you contact your banker, this is exactly who you will speak to. We're the last of the traditional bankers, where you will get our bankers direct cell phone, email and office phone numbers.
Of course, they may reach out to you, more than you will to them. This lets you know they are fighting for your manufactured home loan, and eager to meet your loan closing deadlines.
We look forward to serving you on your next home loan transaction. And if you're ready to check your manufactured home loan eligibility...