Fannie Mae guideline changes in the last 24 months have made it more difficult to refinance manufactured homes. They have not made it impossible. Call me.
In order to qualify for a conventional loan on a manufactured home, here's what you need to keep in mind:
- The home has to be a double-wide at minimum. Singlewides and singlewides with site-built additions are no longer eligible for conventional loans.
- The home must have been manufactured after 1976. There's some dispute about the actual date requirement. Countrywide's guidelines say that the home must have been manufactured after 1975. The underwriter, however, said the guides are wrong. We were just denied a loan through Countrywide on this issue. If you're 1976 or newer, no problem.
- The maximum amount you can cash out on a manufactured home is 65% of the appraised value. Start with that number, subtract the existing mortgage (if any) and your closing costs, and the difference is the max you can take.
- The term of the loan will be 20 years instead of 30 or 40. Again, Fannie Mae guidelines. The practical effect of the shorter term is a higher monthly payment. The benefit is that you're paying more principal each month than would otherwise be the case, and you're saving 10 years of interest. Every cloud has a silver lining.
- You will have to pay about $100. more for the appraisal. The form for manufactured homes is a little more detailed, and the appraiser has to do more work. If the original HUD tags have been covered with stucco (common here in Tucson) the appraiser will have to track down the original manufacturer and provide proof of the date of manufacture.
The phrase I hear most often is "It's not fair." If my home were stick built, falling down, and twice as old, I could take out a lot more." That may very well be the case, but things go in cycles. Right now this is how it is, unless you want to pay hard money rates of 13 or 14 percent.
And that's the real estate opinion of this Tucson Mortgage lender.