There was a great post from a Realtor named Shari George that prompted me to write this blog entry.
Funny, it doesn't look like a trailer!
According to Freddie Mac and Fannie Mae, the two largest investors in conventional mortgage notes, the guidelines (and every major lender uses these guidelines, although they may be more restrictive if they don't feel up to underwriting these properly) for manufactured homes are as follows:
- Built on or after June 15th, 1976
- On it's own land
- Have access to roads, utilities
- Be taxed as Real Estate
- Be on a permanent foundation
- The axle has been removed
- Be at least a double wide...unless it's in a PUD
Manufactured Financing: with a conventional loan (meets the guidelines) the loan would have the exact same interest rate as a stick built-home, with an additional expense of .75 discount points. In other words, if you qualify for a 6% interest rate (about where it's at today) for a $200,000 home, then there's going to be an additional expense of $1500. That's it! Only if you or the property doesn't qualify for a conventional loan would you have to pay exorbitant interest for a manufactured home.
What is the difference between a manufactured home, a mobile home and a modular home?
The mobile is built before june 15, 1976. It's that simple. HUD determines it, and every Manufacture Home has a HUD tag (DON'T REMOVE IT EVER!)
FHA is a bit more restrictive...it has to not only have a permanent foundation but also have it recorded (a 433a) and it can NOT be moved after it is place on the land.
The main distinction between modular and manufactured is simply the codes they are built to. A common distinction is the type of chassis it is built on and delivered with. Even though there is very little difference between a modular home and a manufactured home...conventional guidelines treat a modular home EXACTLY THE SAME AS A STICK BUILT. For that reason, a modular is going to be
Don't believe the hype. A well-built manufactured home is sometimes constructed better than a stick-built home, plus it's cheaper. When you build in a factory, there are less injuries, delays because of weather, and cheaper worker's compensation insurance than building on site.
I HIGHLY recommend that you Google Richard Heyn, SRA. He's a sought after expert by the NAR and, for a fee, your Association of Realtors can have him come teach an excellent classz for Realtors.
Regarding appreciation: In my community, it would have been difficuly to find an average manufactured home on a half-acre over $100k six years ago. Now it would be diffictult to find one under 259k. Perception obviously affects price, and manufactured homes have not appreciated as much (in dollars), but at nearly the same rate as stick-built homes.
I only do residential mortgages in California, but anybody that has questions is welcome to use me as a resource. Take care!
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