So, you’re wondering how to finance a manufactured home. Whether you’re a first-time homebuyer or have purchased a home before, the process of home financing for manufactured homes is unique and usually leaves people with a lot of questions. Like: What credit score do I need to buy a manufactured home? Is getting a mortgage for a manufactured home different than a mortgage for a new stick-built house? Or, Do manufactured homes come with warranties?

In this post, we’ll share our home-buying expertise with you and help answer some of these questions, so you can finance your manufactured home worry-free.

Loans for Manufactured Homes

The process of accruing loans for manufactured homes is somewhat different from the process for stick-built homes.

For example, while you may be able to find financing through a credit union or even through the retailer, financing through a private standard home lender can be hard to find for a new manufactured home. Then there’s the issue of land: Will you need your mortgage to cover the cost of land, or will you be leasing the lot your home is placed on? Lastly, the year your home was built can determine whether it qualifies for certain loan types, so buying new vs. used will be a big deciding factor for many lenders.

Lenders

If you are buying a manufactured home that has a permanent foundation as well as the land it’s installed on, you can secure financing from retailers, government-back loans, or even lenders that specialize in manufactured home financing.

Specialized manufactured home lenders will often be your best bet due to their expertise, and they may be certified brokers of government-backed loans like the FHA.

Loan types

If you’re only financing your home and not the land, looking into personal property chattel loans might be your best option. This loan requires a minimum of at least five percent of the home’s value as a down payment. Loan terms for a manufactured home range from a minimum of 15 years to a maximum of 25 years.

FHA loans are government-backed loans that can make borrowing for manufactured homes more affordable, as long as you meet the criteria:

• The home must be not have been built before June 15, 1976.
• The home must be HUD Code compliant. This is more likely if the home has had little modifications.
• Each home section must have the HUD label attached to it. (E.g., one label for singlewide homes, two labels for doublewide homes, etc.)
• The home must be on privately owned land.

If you qualify, FHA loans have a requirement of at least 3.5% down with a 30-year term, and they also offer low rates. In addition, if you are also purchasing land, both the land and the home can be financed together in one loan.

The type of loan you choose can vary depending on your current situation. Personal property loans, like the chattel loan, may be right for you if you want to finance a manufactured home without property. This would work for most homes in UMH’s land-lease communities, but you may want to secure a substantial down payment for a better interest rate. On the other hand, conventional and FHA loans cover both the land and the home, and have flexible terms that accommodate a variety of manufactured home buying situations.

UMH works with the industry leaders in manufactured home lending, in an effort to help clients secure competitive rates and terms.

To calculate what your monthly payments may look like, take a look at UMH’s home loan calculator.

UMH also offers lease-to-own programs in some of our communities. Our Lease with Option to Purchase Program is an option for those who, for one reason or another, may not be equipped to buy just yet, but would still like to build equity towards their future home purchase.

If you are having trouble searching for an appropriate loan, feel free to contact our team of licensed loan professionals today to see what options may be available for you: wecanhelp@umh.com.

Can I get a loan for a manufactured home with poor credit?

It’s no secret that some lenders may be unwilling to work with you if your credit score is low. Other lenders may set prices according to risk, meaning that if a borrower is risky, they may have to pay a higher interest rate or a larger down payment to make the terms appealing to the lender.

FHA loan brokers may be more forgiving than private lenders: the minimum qualifying score is 500 for an FHA loan. However, if your credit score is between 500-579, you must make a 10% down payment, rather than their traditional 3.5%. It is worth noting that not all FHA lenders and brokers will approve poor-credit applicants. At the end of the day, loan approval is at the discretion of the lender.

More likely, you will need to seek out lenders who work with low-credit borrowers. In this case, expect to pay at least 20% down, and be prepared to show anything you can that makes you appear less risky, including proof of income, bank statements dating back several months, and any debt you may currently have.

If you’re considering community living but our concerned about your credit score, the UMH COP program looks at credit scores from 450 and up, and offers a low interest rate of 6.75% on new homes placed in a UMH community for 25 years.

Warranties on manufactured homes

It’s a well-known phenomenon for people buying older stick-built homes: whether it’s the roof, the foundation, the electrical, or something else entirely, there will probably be some repairs. Lucky for you, when buying a brand new manufactured home, this wear and tear won’t be present. And, the fact that manufactured homes are built with streamlined, time-tested scientific processes means not having to trust a contractor or builder to do the job right!

However, while it is a very small percentage of homebuyers who experience issues with their brand new manufactured homes, it can sometimes happen. That’s where warranties come in handy.

Home manufacturers, installers, retailers, third-parties or even appliance manufactures may all offer their own warranties, each of which covers a different part of the home. Some of them you may want, and some of them you may never need. So what are the best options?

Manufacturer warranties are the most appealing options, as they come directly from the manufacturer who built your home. Most manufacturers offer warranties with reasonable terms up to one year or more. To ensure you can redeem your warranty when you need to, make sure you’re aware of what claims you can make and what sort of home modifications may void your warranty.

Appliance warranties may vary, but if you are purchasing a home that came with a full appliance package – as most of UMH homes do – be sure to enquire about what warranties are available for your new kitchen appliances!

The Manufactured Home Buyers Guide

Buying a manufactured home? This guide includes all you need to know about home buying – including financing, manufactured home loans, comparisons and features, buying new vs. used, placing your manufactured home, designing a manufactured home and more.

Should you buy a manufactured home?

If you’re here, it means you’re probably taking steps towards buying a new home. Congratulations! There are few things more rewarding than owning your own home.

If you’re considering a manufactured home as an option, you’re probably wondering how they stack up against other home types. So, first thing’s first.

What is a manufactured home?

Some people think of “mobile homes” when they think of manufactured homes. However, mobile homes are actually older, lower quality and under-regulated. In 1976, manufactured homes become HUD-approved, which means that they must be built with the same standard quality as stick-built homes. In 1980, the Housing Act ruled that “mobile homes” should be referred to as “manufactured homes” for structures built after 1976. Nowadays, manufactured homes often even exceed the quality standards and dependability of older stick-built houses!

Manufactured homes are constructed off-site in climate-controlled facilities and moved to location once completed. From the inside, most people wouldn’t be able to tell the difference between a manufactured home and a stick-built hose. From the outside, they do have some notable features:

• Most manufactured homes have vertical paneling along the bottom, called a “skirt.” That’s where the crawl space of the home is.
• They are long and rectangular in shape, so that they can be easily transported on the highway.
• Many manufactured homes have porches, and even carports or garages.
• They come in two standard sizes: Single-section and multi-section.

Other home types

Modular houses

Modular homes, like manufactured homes, are built in factories or off-site facilities. Unlike manufactured homes, they are usually larger and designed to look like stick-built homes. are built on permanent foundations like a basement or a crawl space, and comprised of many modules assembled on top of it. The possible configurations are limitless! Modular home builds can be very impressive, but they generally come at a higher price point than a manufactured home.

Stick-built houses

Stick-built houses are probably what you think of, when you think of a house. They are built on-site, and as such can be subject to weather and climate conditions during the construction process.

Tiny homes

A tiny house is precisely what it sounds like. Ranging from 100-400 square feet, a tiny house is built to be minimalist and down to the essentials. For people who desire a simpler life, an efficient space, and a good reason to downsize their belongings, tiny homes are a trend that’s catching on. How do manufactured homes compare to other home types?

Here are some of the factors that a potential homebuyer should consider: Cost, square footage, lot placement, customization, and energy efficiency. Let’s explore how manufactured homes stack up against other build types.

Cost

Tiny Home: $23,000 (source: realtor.org)

Manufactured Home: $69,000 (source: census.gov)

Stick-Built Home: $269,000 (source: census.gov)

Modular Home: $211,638 (source: modularhomeowners.com)

Price is a key factor in the accessibility of home ownership for many Americans. The average listing price of a manufactured home is less than one quarter the average cost of a stick-built house, and closely comparable to a modular home as well. Tiny homes rank #1 in affordability, unless of course you’re looking at price per square foot. They come with their own caveats, as we’ll see below.

Size

The sticker price of a home is one thing, but what about cost per square foot? Tiny homes are a romantic idea for many, but the minimal living space might not work out very well for growing families, or elderly homebuyers who aren’t willing to climb a ladder to their bed every night. That’s where the size of your home factors in.

Tiny Home: 100-400 sq. ft.

Manufactured Home: 850-1,600 sq. ft.

Stick-built Home: 1,400-2,399 sq. ft. (source: houseplans.com)

Modular Home: 1,600 sq. ft and up

With tiny homes, you are locked in to a restrictive size for easy mobility. Manufactured homes must be a built to lengths and widths that are legal for highway transportation, but unlike tiny homes, can be assembled as a multi-section home for more space. Stick-built and modular homes, of course, vary from quite small to Beverly Hills-level large! But due to more restrictive and expensive building costs, both stick-built and modular homes will have a higher price per square foot, meaning of all four options, manufactured homes offer the most bang for your buck.

Lot Placement

Your home is where you will live – but where will your home live? For people who have never bought a home with mobility before, this might not be something they immediately think of. Obviously, for stick-built homes, this is not an issue, but what about the rest of them? Modular homes require a foundation, and as such, people who purchase modular homes almost always own the land they place them on. Once they are assembled, they cannot be moved, so for this category, they are again comparable to site-built. And what about the tiny home? In many places, it’s hard to live in a tiny house legally. Building codes, local zoning laws and county ordinances all must factor into tiny house planning. Alternative forms of affordable housing tend to address this issue better than their tiny counterparts. Manufactured home builders follow federal Housing and Urban Development codes, so they can often be placed anywhere that is zoned for a stick-built home (though this varies by county ordinances). Plus, many buyers have the luxury of placing their new home in a community that has already been zoned accordingly. That means not having to sort out your own plumbing, electricity, and water hook-up which is something I think most of us could do without!

Customization

Everyone loves a good “demo day” on HGTV (short for demolition), but in reality, home renovations are a notorious nightmare. For older stick-built homes, the plumbing, electrical wiring and other materials hiding behind your walls are a mystery and potential hazard that can limit your modifications. Brand new stick builds are costly and timely. Modular homes can be very customizable; modularity introduces near infinite possibility! Many modular home builders have pre-spun floor plans that can be customized to your home lot and design desires. Tiny homes, while known for their craftsman character, do have limitations on customization. Because the space is so small, most features need a dual purpose. For example, a couch with hidden storage, or a table that folds up when not in use. The need for extreme functionality sometimes comes at the cost of personal style. Not only are manufactured homes the easiest to customize if you’re buying new, but manufactured home customizations have also blossomed over the years. A far cry from the cookie-cutter pre-fabs of decades ago, most manufactured home builders offer a wide range of customizations. From cabinets to floor plans to appliances, the growing options give buyers the opportunity to design the home of their dreams. Also, all of the components put in manufactured homes today, are the same materials used on site-built homes. If you need to do a repair, you can use any product you find at Lowe’s or Home Depot in your manufactured home.

Energy Efficiency

If energy efficiency is what you’re after, the average tiny home might win out. But for years manufactured homes have been designed with energy efficiency in mind. They are the original “green living” home, and are still far more efficient than your average stick-built or modular home. Many manufactured home builders are Energy Star Certified, which means their homes are designed to meet the EPA’s strict guidelines for energy efficiency. This includes standards for effective insulation, high-performance windows, tight construction ducts and appliances and heating/cooling systems that use less energy. So while the tiny house movement tightly couples with less consumption and the “off-grid” lifestyle, manufactured homes are designed to maximize efficiency without sacrificing comfort and amenities.

So what’s the verdict?

Ultimately, the choice comes down to your budget, lifestyle and home aspirations. But for homebuyers looking for an affordable, reliable home, manufactured homes are a great choice! Read on to learn more about the logistics and decisions involved in buying your first manufactured home.

Buying Used vs. Buying New

Of course, the most important thing for new homebuyers is the quality of their home. A lot of this can depend upon the age and history of the home. Unlike site-built homes, manufactured homes depreciate in value over time. Used manufactured homes for sale will often be less expensive than new ones, but new ones will often be easier to secure a loan for. So which is the better option?

Buying Used

If you plan on buying a used manufactured home, there are some things you should know. For starters, any manufactured home built before 1976 will not have been held to HUD regulations, and should always be considered a risk. And not all used manufactured homes can be moved, so if your plan includes placing the home on a different lot, be sure to verify that this is possible. Homes that have been extensively renovated or placed on foundations may be permanently fixed to the land they reside on. And of course, as with anything previously owned, be sure to adequately inspect a used manufactured home before purchase. Looking for signs of water damage, deterioration and assessing regular wear and tear before you buy will help mitigate any surprises! If it all checks out, a previously owned manufactured house can make a wonderful new home.

Buying New

Buying new is appealing for many reasons. For one thing, buying a new manufactured home through most manufacturers means you can customize it to your liking: cabinetry, appliances, flooring and more! And while a new home will surely be more expensive than a used one with the same specifications, there are some financial incentives. Loans may be easier to secure, and most new manufactured homes come with warranties.

Financing a Manufactured Home?

So, you’ve looked at manufactured homes for sale, found your dream home, and now you’re wondering how to finance it. Whether you’re a first-time homebuyer or have purchased a home before, the process of home financing for manufactured homes is unique and usually leaves people with a lot of questions. Like: What credit score do I need to buy a manufactured home? Is getting a mortgage for a manufactured home different than a mortgage for a new stick-built house? Or, Do manufactured homes come with warranties? In this section, we’ll share our home-buying expertise with you and help answer some of these questions, so you can finance your manufactured home worry-free.

Click Here to Read More of our Blog Post on Financing A Manufactured Home to answer all of your quesions including:

• Loans for Manufactured Homes
• Warranties on Manufactured Homes
• and more!