Have you had someone tell you that financing a manufactured homes is difficult or impossible?
Please don't let yourself be discouraged from this valid housing option. Manufactured homes are actually just as easy to finance as a site built home, but a lot of people are unfamiliar with the process of purchasing a manufactured home. Even most realtors lack knowledge about manufactured homes, so they often leave out this option when helping families find their perfect home. This is a huge disservice, because for a lot of people a manufactured home is a great solution to their budget and space needs. If you think that this might be a good option for you, then make sure you arm yourself with all the facts before making a decision!While some of the major banks do not do financing for manufactured homes, there are tons of banks that actually specialize in this industry. These banks have the same requirements for a loan as any other bank would for a site built home. The first decision you will have to make regarding financing your new home is which type of loan you will require. For manufactured houses there are three major types:
1. Land/Home: this is a loan where you are purchasing a new home with a new piece of land or an existing home already on a piece of land, so think of it as a package deal loan. Most of the time these loans looks almost identical to conventional FHA loans for a site built home.
2. Land in Lieu: This is a loan where you are using a piece of land that you already own as collateral for the loan or if you have been gifted a piece of land from a family member or friend. Oftentimes if the land value is equal to or greater than the down payment required for the loan there is no additional cash payment required. This is a great option for families that do not have any money to put towards a down payment but do have land.
3. Chattel: this loan is used when you are only purchasing the house only. This would be an option if you already own land to place the home on and do not wish to use it as collateral, or if you will be renting a space in a community or park to place the home on temporarily.
Once you have decided what type of loan you will need, most manufactured home sales centers will be able to assist you in finding a lender and putting together a budget to have a better idea of what will be required. These housing consultants are trained in figuring out the best option for you, so do not be afraid to ask them questions, it is their job to help!
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