We recently started financing Manufactured homes and as with anything new there are changes to be made and anxieties to get over. I had heard a few horror stories from other licensed mortgage bankers and was a little hesitant at first to step into this arena. I’m now sure that while there were some issues they are the exact same issues faced by traditional stick built home owners. There are definitely socioeconomic biases out there working against the owners of manufactured homes which is a shame because it appears to be an under-served market. On the bright side for me personally, there isn’t a lot of competition and many clients are very relieved and grateful to find reasonable lending terms! Here is what I've found so far-
#1 I’m proud to make a difference
I have seen well qualified customers with 10% interest rates in the last month on several occasions! Manufactured Home Owners have apparently been resolved to the fact that they would have to keep their builder recommended financing for the full term. They have gone through numerous inquiries just to be told the same thing, lenders don't want to lend on these properties and if they do, the restrictions are impossible and the rates are very high. My clients have all been discouraged by their search for a new lender, most have been looking for several years to find a reputable banker. A quick Google search shows articles about home owners talking to over 40 lenders with no luck. To be able to finally show a customer a market rate on a traditional fixed loan and to hear the relief in their voice after they realize it's real is phenomenal. My team has put all the pieces of this puzzle together to make a real difference!
#2 Values aren’t an issue as long as the property is owned as well as the home
Values dipped for everyone but many of these homes were financed on 15 year terms or clients made bi-weekly payments and have decent equity now. Many manufactured home owners were responsible and wanted to live below their means and behave fiscally responsibly. This means they have paid more towards their home than many suburbanites who are upside down on their home and obtained I/O or ARM loans to keep the payments at the same level. So while our "Traditional" client has been paying on an Interest Only $280,000 Loan for the Last 8 years with a 6.5% rate still owes $280,000 on a $220,000 home, but our Manufactured Home owner borrowed $160,000 and has been making the exact same payment only owes $95,000 on a $125,000 home. The Manufactured Home Owner has over 20% equity in the property and will be free and clear in 7 years. We can refinance into a new 7 Year program and show them how to be free and clear in less time or offer some cash flow relief on a new 15 year or even 30 year fixed conventional/government backed option. The qualifications are actually easier to achieve with a manufactured home loan.
#3 Documents come back fast which allows for faster closings
I have found that many clients have been taken advantage of in the past. They were stuck at 7.5% - 10% and told that’s the best that they could obtain. When they find a good loan and realize that it's not actually too good to be true most clients are very keen to supply documents needed for fear that the rug will be pulled out from under them. It's almost as if my clients believe they better get this loan closed before someone closes the "loop hole" that's letting me finance their home at a standard interest rate. Decent Manufactured Home loans have obtained almost Mythological standards. I'm here to say that the Conventional Manufactured Home loan is no Myth. Standard Market Rates apply and I can lock in clients for the same rate that my stick built home clients lock in. That being said, I love the urgency. I love that we can close loans at a fast clip and lock in rates before the market trends too far upwards. My team was built for speed and we love the challenge!
Manufactured Home owners aren't second class Mortgage Citizens relegated to high interest rates and nonchalant service. My team can now make a real difference in your cash flow, it's easier than you think to close a loan and we can do it at Top Gun type speed. If you or anyone you know has been lead to believe that there isn't anything better out there please contact me and I'll put you in touch with someone who can help.
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