I have been in the real estate business now for over 8 years and I have been involved in hundreds of residential transactions. From your standard single family home to your manufactured home on 30 acres and it seems that manufactured homes are the least understood by agents and loan officers.

The reasons that I believe is that they have different underwriting guidelines that are unique only to these properties. Not only are there different underwriting guideline but each lender and bank that lends on them has different guidelines. So what may work with one bank as far as getting conditions met, will not work with the other and vice versa. 

One lender may take an appraisal with value up to 5 acres and the other may give you value to 10 acres. One lender may accept a post and pier foundation and the other requires a continuous brick perimeter masonry foundation. One lender may take business bank statements for proof of income for self employed and the other requires personal bank statements.

I really can go on and on about the differences and an inexperienced manufactured home loan professional that doesn't understand the various guidelines will most certainly make a mistake somewhere.

For example lets say you have a manufactured home listing on 12 acres and you get a buyer who is self employed that makes an offer. Everything looks great. Your in house lender who has done a few of these in the past prints out a pre-qual letter, an offer is accepted and you enter the property under contract in the MLS.

Everything looks fine and dandy. Appraisal is ordered, inspections and your buyers is working hand and hand in getting all loan conditions in. They send is all their bank statements, pay for an appraisal and are moving just as fast as you all are. Everyone is excited.

The appraisal comes in and is sent to the lender. 24 hours later your appraisal is rejected and the loan is suspended. You deal is dead and your loan officer feverishly tries to figure out what's going on.

Turns out that this particular lender gives value only on 5 acres, the appraiser gave full value at 12, the comps that the appraiser provided are not all manufactured homes, it's not on 1004c appraisal form as required for all manufactured homes and the nearest actual MH comp is 9.9 mils away.

Now what? Well the loan officer now has to talk with the appraiser and fix everything to save the deal. Essentially what you are asking the appraiser to do is do his job all over again and redo everything because that first appraisal is worthless and he now is going to charge a trip charge because none of this was on the special instructions on the appraisal order form. After going back and forth, the appraiser agrees to handle it early next week because now he's not getting paid and his motivation went for 100% to about a 5% to get this handled. Especially if you never used the appraiser before.

OK, a week or 2 goes by and the appraisal comes in and it looks perfect. Loan officer emails it to underwriting and the next day you get it signed off. Yipee! Your out of the woods now. Well not so fast buddy.

While the appraisal was being worked out. The borrower was digging up all their bank statements to prove income. Ordered about 4 months that were missing and it took a week to come in the mail. The loan officer packages them up and sends them to the lender and tells the agent, "All conditions are in, go ahead and schedule the final walk through and tell Mr Jones he can move to Alaska because we will close early next week."

Monday a fax is received, loan is denied for insufficient income. The loan officer calls the Account Executive and says, "What, The borrowers pulls in $50,000 a month and I proved that." The AE says yes but we only take personal bank statements for self employed borrowers. Big mistake.

The LO calls the borrower and frantically asks for personal bank statements ASAP. A week goes by, they arrive in the mail and the borrowers sends them in. The LO calculates the deposits and it comes out to $1,800 a month. The mortgage payment is $1,800 a month! Oh no! The seller is in Alaska and the buyer bought $10,000 in new furniture and you don't even have a deal. In fact it's as dead as they get.

Oh wait, the LO says. I'll take it to lender B who said they will take business bank statements. But little does the LO know that that lender will only go to 75% LTV and you need an 80% to make the deal happen. Plus the appraisal need to be redone yet again because they will accept value at 10 acres and that where you may be able to get that extra 5% to make it 80%. So time to call that favorite appraiser of yours.

If any of you have been in a manufactured home transaction, then you know what I'm talking about here.

The point I'm trying to make is be very careful on who you send your client to when they need a manufactured home loan. You may have a great relationship with a loan officer that is the best at what they do, SFR loans but that doesn't ,mean squat when they get they handle a manufactured home loan.

A seasoned professional that you recommend can look like an amateur very quickly if they don't understand these loans and make you look just has incompetents because you referred the LO. If you have been in the businees for any length of time then you know what I'm talking about and if you don't then use this as a lesson and don't let it happen to you or your commissions!

Manufactured home deals are some of the hardest deals to close and in this tough real estate market, agents need to make as many deals happen and improve their closing ratios so they can make the commissions that they work so hard for. So next time you have a manufactured home deal, make sure that the borrower is referred to a competent and professional manufactured home loan professional and not just any loan officer.

Better yet, if you take a manufactured home listing, contact an LO who specialize in this type of financing and work hand and hand with them in marketing the property properly and make sure all potential buyers are screened by the loan officer, even if that buyer has a fresh pre-qual letter because you and I know those pre-quals aren't worth more then the paper they are written on.

Best of luck to you all!