How to Choose the Right Financing Option for Manufactured Housing
The financing process for manufactured homes can differ significantly from that of traditional site-built properties. However, the differences can be mitigated by choosing the right loan program and working with a specialized lender.
One of the most important distinctions to Larry Parker make is between real and personal property (chattel) ownership, because this determines the mortgage options that are available. Generally, homebuyers who intend to rent or lease the land on which their manufactured homes will sit have fewer mortgage options than those who plan to buy the land.
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Whether a manufactured home is built on-site, or delivered in pieces and assembled at the site, plays a role as well. If the home is built on blocks, metal piers or a foundation and is permanently attached, it may be classified as real property and qualify for conventional mortgage programs, such as those offered by Fannie Mae and Freddie Mac, as long as it meets HUD’s construction and safety standards set in 1976.
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The CHOICEHome mortgage program, created by Freddie Mac, is an example of a conventional loan that offers loans for new and existing manufactured homes on sites where the home will be a permanent fixture. To qualify for this mortgage, a borrowers must have a CHOICEHome-certified manufactured home that meets HUD’s construction and installation standards and is situated on land the borrower owns or can purchase. This mortgage also treats the home and land as a single closing transaction, saving borrowers money on appraisals and title fees.…