financing descrimination

[mike]

we own a 1997 silvercrest manor home sited on a 1 acre forested lot in one of the most beautiful areas of california. we chose this home because it offered us the most bang for our buck in an area of expensive building costs. we also chose the silvercrest home after research and found it to be of better quality than most of the site built homes in our area. we sited it on an overbuilt perimeter foundation with a double car garage and beautiful landscaping. friends and aquaintances who visit are amazed that it is a manufactured home because of its beauty and quality.

the problem we have is that we are currently wanting to refinance and are feeling descriminated against because we are classified as "trailer trash" because of the stigma of this home being built in a factory instead of on site by "gomers construction co". the appraisor had to use comparable sales to value the home only with other manufactured homes in our area which caused it to be approximately 25% undervalued compared to site built homes in our area. our home is the envy of our neighbors and is built to last but it cannot be appraised in the same catagory as our neighbors not as nice site built homes.

most of the problem comes from the financial industry being behind the times. they still see us as "trailer trash" not smart buyers. is anyone else feeling this way? what can we do?

[Jon]

Mike:
Financing has been a problem for many years. Over the last five to ten years the finance industry has been "getting up to speed" in regard to manufactured homes but it is not quite there yet, especially in some areas of the country. Ditto for most appraisers.
The first thing you should do when calling a potential lender is to ask for a home (not manufactured home) and land loan. The fact your home is manufactured should enter the discussion later. But the initial conversation should not mention manufactured home. I'm suggesting you lie or mislead anyone, and if a lender should ask about a manufactured home you should respond truthfully. However, I am suggesting that many loan officers (the person you will likely encounter first) don't understand what a modern manufactured home is. Too many of them still think a manufactured home can be hooked up to a Volkswagon and hauled away in the middle of the night. So their initial reaction tends to be negative. By simply requesting information on a home/land package rather than immediately inquiring about a manufactured home loan, you are keeping the loan officer's mind open to all the facts about your particular situation. Once all the facts are known by that individual, including the fact the home is manufactured, you should at least get consieration that is more balanced ... if not the loan.
If that doesn't help, there are financing companies, some of which operate on a national basis, that specialize in manufactured home finance, though they sometimes charge a somewhat higher rate than you might have otherwise obtained locally. Usually there are several that advertise with or participate in this mfdhousing.com website.
Another thing: Try to get your manufactured home appraised by a certified manufactured home appraiser. Such a person understands the values of these homes. If that person is also licensed to appraise your land, all the better. If not, he/she will use another appraiser who is so licensed. When they combine the results of their work you should have a pretty good estimate of value.
Good luck. Jon.

[Clive collins]

As a Broker I see many situations similar to yours Mike. You really should not have to many problems getting financing although, Jon is correct it is sometimes hard to find a loan officer out there that understands the whole concept and also knows where to place the loan. Refinancing should be a breeze especially if you are a borrower that fits the "conventional" financing profile. ie: Home is taxed as real property, good credit, acceptable ratios and loan to values (LTV's). As for the property value issue, ask your self these questions first. How much did you pay for the land and home? How long ago was it? How much have you spent on it? (imrovements etc) And are all the improvements complete? Are you in a rural setting. How old is the physical structure?
As a rule of thumb I add 3% per year for appreciation and 40% of the $'s you spent on perm improvements to gain value. But this can differ greatly in different parts of the country. Some items add more value, like fencing etc. Is the market declining? Is a MH normal for the area? A good appraiser will search out the right "comps" for you but they must be based on "like " housing, so the mansion at the end of the street is not going to help you. You can always drive your neighborhood to find MF homes for sale. Contact the agent and ask their advise and if they have any comps you can look at. Remember though, we all think our house is worth more than we think!!!!!

Clive.

[Michelle]

Mike,

As a loan officer in Texas, we do run into the scenario you present. My company specializes in financing for manufactured land/home packages, yet consistently we are unable to obtain appraised value due to the inability to use stick-built homes as comparable property. Know that lenders are fighting to change this view, since we consider your home and land to be real property we also feel it should appraise as real property using the same comps that real properties use. Most lenders fear doing these loans just for this reason. The majority of the homes I deal with are in extremely rural area and it's impossible to find comparable properties without going to site built homes. As I continue my search to find out what we can do about this I will definitely keep you posted.