Buying a mobile home in RI

So, you want to buy a mobile home in Rhode Island?

People often think this is the most affordable way to buy in RI.  If you can pay cash, you often pay much less than you would renting.  There are several issues to think about.  First of all, there is financing. 

 If you don't have the ability to pay cash, you will need to find a way to finance. 

You can't just go to any bank and get your garden variety pre-approval for this.  Unless the unit is on it's own land, you will have to go to one of only a handful of lenders that will be willing to finance one on leased land.  For anyone interested, I have compiled a list of these, contact me.  The rate is usually about 2-4% higher than the current rate on mortgages.  The finance companies are usually more strict with credit, as well.  They require 10-20% down and will finance for about 20 years but that depends on the age of the unit.  For the most part a mobile home built earlier than 1976 cannot get financing, but some lenders will approve them if the unit has had substantial updating.

Insurance is fairly easy to get on them, for some reason people think that would be the difficult part, it is not.

Inspections are the same as with any other home, and the price for those is the same, too. 

The park restrictions are probably the most important consideration.  Many parks do not allow motorcycles,

dogs or renters.  Some have age restrictions which could mean no children or no residents under 55.  Typically the age restricted parks will make exceptions for handicapped individuals.  There can also be credit score and income requirements.  Even when paying cash some may require a substantial monthly income to get a lease with the park which can be an issue for those getting Social Security or Disability payments.

So is it more affordable than a typical single family purchase?  Let's look at the numbers:

Let's take a Coventry starter home with 2 beds:   $144900 purchase price 3% down with a 30 year fixed at 5.68%, taxes of $2276/yr., fire tax of $188/yr., payment for taxes & mortgage would be $1019.32 a month.

Now a 2 bed mobile home in a leased land park I am using numbers from a park that allows children:  $62211 purchase price 10% down with a 20 year fixed at 9%, taxes of $529/yr., fire tax of $123/yr., park fee of $368/mo., payment for taxes, mortgage and park fee would be $926.09 a month.

Not as much of a savings as most people think.  Obviously, there a a vast number of scenarios out there, some may come out much differently.  But I think it's always a good idea to do all the numbers to make and informed decision.