Financing for Manufactured Home Quandry

[Anonymous]

First off... Hello, everybody!  My husband and I are first time home buyers with good to better credit (the better is his). I only have my FICO at hand right now, but it's 698 and his is closer to 780.  We're moving to TX from KY this spring and have decided to purchase a home instead of renting.  We want to pursue a FHA loan with the required 3.5% down.  I have a dilemma, however.

My husband has found several listings for rural acreage with manufactured homes upon those acres.  I don't have anything against manufactured homes, esp some of the newer ones with permanent pinnings. They're HUGE!  These listings are very reasonably priced, technically below what a mortage agent told us was our "affordable amount for a loan."  They're idea of affordable and mine don't really mesh.  heh.  The one we're most interested in is $50,000 on 5 acres. The problem I'm having is finding financing.  The agents I have spoken to down there are telling me that practically noone is offering mortgages on manufactured homes at all due to the fact that they lose so much value and the mortgage crisis.  

Does anyone have any suggestions about how to go about getting such financing?  Do I go straight to a bank?  I'm so confused by this and my husband now refuses to let go of that price range and acreage since he's seen it.  I admit that it's nice to forsee low monthly payments with the ability to pay off the loan much earlier than the term.  I'm just at a loss.

Also, the agent told me to expect to have a higher required down payment with a higher interest rate applied to the loan due to the fact that it's a manufactured home.  I'm going a little nuts here trying to figure out what's really true.

Thanks ahead of time for any advice you guys can offer. 

[Jazzzy]

Hi...and welcome to the forums.

My husband is a real estate appraiser. We are nowhere near Texas, however.

I asked him how tough it is to get a mortgage on a manufactured home. I was explaining your situation. He was shaking his head before I even finished the question. He said it's tough. The banks don't want to do them because their investors won't buy the loans. He said that the banks don't even want to try.

Your best bet may be to find a bank who keeps portfolio loans...in other words, they keep the loan in house. That is sometimes tough to do when you are new to the area. We can go down to our corner bank and get this done, but they know us. Also, there is owner financing with a note and mortgage. This also can be very tough to find. We are in the process of buying one now for a rental unit, and the owner will carry the financing. It's rare...but it happens. This owner wants the interest income.

There is a difference, however, between a "manufactured" home and a "modular" home, although they look exactly the same from the outside. A manufactured home will have HUD stickers on it. A modular home doesn't have the stickers. A modular home can be built in the very same assembly line, but if it is built to UBC Code (rather than HUD code) then it is modular and not manufactured and is eligible for both FHA or conventional financing. One example of a difference is the floor joists. A realtor (and especially the county tax assessor) should know the difference, but my husband says they often mess this up. We had a friend who had two buyers for her modular home, but since the county assessor had it listed as manufactured, she lost both those buyers. When my husband was called on to appraise the home the third time around, he was able to straighten out the misunderstanding, and she got financing.

In other words, some of the homes you are looking at may be modular and would qualify for financing. Your challenge would be finding someone (a realtor) who understands the difference.

[Anonymous]

RNFlea,

I am a property adjuster and deal with mobile homes alot. There are several companies that I have seen as lien holders and you may want to check into them. GreenTree Servicing, GMAC, and Vanderbilt Mortgage. I have also seen some with Wells Fargo, Chase and BofA, but I highly doubt they do them anymore. Do you know where you are moving to in Texas?Thats where I am from and maybe give you a little more info if you are around the same area. Alot of the local banks will do financing and you may want to call some of the local mobile home lots to see who they use for financing. I do agree w. your agent and you are probably going to have a higher interest rate. Most mobile homes come with a title (like a car title) but some do come with deeds. If you have any other questions feel free to PM me and I will help answer.

[Anonymous]

Thanks for the responses!  I'm going to look into some of those companies you've mentioned.  And I know, for sure, this is an actual manufactured home and not a modular.  The ones we're looking right now are all double wides. heh.

We're looking in the Denton County area.  North of DFW.  Lots of rural and semi-rural areas up there.