If you are just starting your home search or ready to take the next step toward home ownership, financing a manufactured home can be a bit overwhelming without a few simple tips I am going to share with you today.
Manufactured home financing can split into 3 Categories - Chattel (Home Only), Land Home, and FHA/VA.
Chattel - If you own land or have access to family-owned land, you can apply for a Chattel Loan.
A Chattel loan does not include a land purchase. We can include minimal home and site improvements in the loan. Examples of improvements you can include are foundation, skirting, water hook-up, electric hook-up, sewer hook-up, and deck/permanent steps.
Land Home - This type of loan has a few different strategies to use depending on what you want to accomplish.
Land Home Package - Just like it sounds, you are purchasing land and home together as a package. You would only have one payment for the land, home, and any improvements. Land Home loans can include standard Chattel improvements as well as: septic, driveway, fencing, water meter, electrical pole/meter base, and more.
Land in Lieu - If you own land you can use your land equity in "lieu" or in place of a down payment. Essentially you can purchase a home and improvements with no money down as long as the land appraises for 5%-20% of the requested loan amount. The percentage % required will depend on your credit score and proposed land size.
Refinance Land w/ Home Purchase - If you have a land payment you can refinance the land and purchase a home. You can also include Land Home improvements in this type of loan. This is another scenario where you could purchase a home with no money down if the land is appraised for 5%-20% of the requested loan amount.
FHA/VA - These loans are government programs that have different requirements when you are applying for the loan and during the construction phase.
FHA - The Federal Housing Administration (FHA) is an agency that insures and promotes affordable, easy-to-qualify-for home loans. FHA insurance was created shortly after the Great Depression. FHA loans are beneficial to Americans with a limited credit profile and typically require less money down than conventional HUD financing. It is best to speak with a sales consultant who is familiar with the process to decide if this type of loan would benefit you.
VA Home Loan Program - This is a government-backed mortgage made available to veterans. Little to no money down and competitive interest rates are a few of the benefits given to veterans who qualify. Keep in mind if you want to purchase a HUD home, the home may be required to be installed and utilities on before you can apply. Ask a sales consultant who is familiar with this process if they have any spec homes that qualify for a VA loan.
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