FHA Financing on manufactured home/land

[odyssyus]

I'm doign some research on how to get an FHA loan for a land/home purchase and the information i'm finding is that you can get a Title 1 or 2 FHA loan.

The loan limits on these loans are completely out of whack with actual costs i.e.

"The maximum loan amounts are $48,600 for a manufactured home, $16,200 for a manufactured home lot and $64,800 for a manufactured home and lot. Terms range from 15 to 25 years."

Is this true ! ? Correct ?!
Can you not get a 203b loan ?

[rmurray]

It is way confusing as you are finding out...You are right, manufactured homes can be mortgaged with either title 1 or title 2..Most often title 1 refers to something commonly called home only loans though land can be included..This program does have very low maximum loans available..The down-payment is about 5% (actually 3% of the first $5000 and 5% of the rest..)

Title 2 is the typical FHA mortgage which can mortgage stick built, modular or manufactured homes (when on a permanent foundation)..Terms would be up to 30 years and they do offer variable rate options..Down payments are 3% of purchase price and seller can pay up to 6% in closing costs...Maximum loan amounts vary by county..But in GA they range from $201,000 to $252,000 in higher cost areas. Rates vary by lender and closing cost also vary by lender. This is the plan most folks use when buying a new manufactured home...Used manufactured homes can also be mortgaged by this plan...Problem is most currently lived in manufactured homes DO NOT sit on FHA acceptable foundations..

As far as 203b is concerned, I found this on the FHA web site:

"Mortgage Insurance for One-to-Four Family Homes [Section 203(b)] is the centerpiece of FHA's single-family mortgage insurance programs and the most commonly used program. It has these advantages:

Availability: in all areas of the country, provided a market exists for the property and the home meets HUD's minimum property standards
Versatility: may be used to purchase or refinance a new or existing one-to-four family home in both urban and rural areas, including manufactured homes on permanent foundations.

The best site I have found for FHA info can be found here;

http://portal.hud.gov/portal/page?_page ... ema=PORTAL

[odyssyus]

Yeah.. thats what i found too. Based on my research, the difference i'm finding is the title 1/2 loans are on manufactured homes without permanent foundation.

You can get a 203b insured by FHA provided the foundation is approved and inspected by an engineer to meet certain requirements. They also require you to go to the DMV and change the 'house' from personal property to real estate thru some document (have to find it again). Problem is trying to explain that to some of the larger banks.

Thankfully.. Wells Fargo finances them as FHA 203b. Looks like that is goign to be one of my only choices.

[donjon19]

Hi I am new to this. My husband & I are looking into buying a new manufactured home in a 55+ community in central florida. We were told he cannot use a VA loan to finance because the home will sit on rented land. That's not what we are getting from the VA website. Do you know how true this is?

[David Oxhandler]

Just what is the deal with the financing for manufactured homes? Ever wondered why it seems so difficult? Or mysterious? Or even impossible? it does NOT have to be this difficult. This is not rocket science. There is, however, a CORRECT way to get them done. If you have ever tried to get financing on manufactured home on land, you KNOW about how crazy the process can be. Get more details see the latest addition to our e-book instant download section The Secrets of Manufactured Home Financing

[suebow]

why do they say if you own your own land and want to buy a new home that you have to finance the land (that you already own and have already paid for) along with your home? This makes no sense to me at all. I understand that the land will be used for collateral but to have to pay for it again just doesn't ring true. Maybe I am misunderstand this.

[rmurray]

I do think you misunderstand the concept a little...You do NOT have to use the land to buy a manufactured home...HOME ONLY finance is very common..The only collateral will be the home and the items that come with it...but..if you default the lenders will sell it to the highest bidder and the loss will continue to be your responcibility..the the lender can go to court and get a judgment which attach's all of your assets including your land..This basically means that your land is at risk even if it is not on the loan...Because a few folks do not pay and losses are very large home only is riskier for the lender,which means he will charge a higher rate of interest and have tougher rules..They will require larger downs and much higher credit score (usually 5 to 10% down with minimum scores of 640). Also they will be more conservative on your debt to income ratio..Many folks who do not qualify for home only will qualify for a land/home mortgage...

You will not be financing your property only the house and tax and closing costs..The property's value will stand as down payment for the lender. Your net worth will not be lower but he equity will be tied to the home..

If your property is already inproved which means it is worth some tens of thousands, I do not think FHA would be your best choice of mortgage.
FHA has fees associated with it that make it not the best deal if you can avoid it. A conventional mortgage will be less expensive. Conventional mortgages will require average scores of 640 or better and equity of at least 5% (you should have much more than that). Interest rates for these mortgages will be about 4% lower than home only saving typically $100,000 interest over time on the typical home. If your credit scores are too low, FHA will be the right route. FHA does NOT look at credit scores only your payment record especially in the last 2 years

You see the land will allow the bank to get you a better deal. Saving more than the land is worth many times over..

If you are afraid you might not be able to pay..DO NOT buy the home..But if you can afford the home, use all your tools to save the most money..GO FOR IT

[suebow]

Thank you so much. You made it so much clearer and now I understand. I am sorry I posted this question twice but didn't think my first question had gone through.

You guys are awesome with all your great answers to help us folks out here who are not "savy" to the ways of the manufactured home buying and financing. Most of us would just be floudering around without your help and expertise.

Again, thank you and I will probably be back with more questions.
Sue

[rmurray]

You are welcome...Remember knowledge is power...Come here often and ask all you want..

Sorry about the delaying live posts..It has not always been that way. I was a moderator of the board before the change and got all posts emailed to me..The spam got bad much of it was vile debauchery...It took the web master hours everyday to delete them..Eventually it got to thousands of posts a day.Most for foreign porno sites..Finally the webmaster had to decide for review approval of all posts..The process is such that most will be live in less than 24 hours, often much sooner. Out and out spam gets deleted as well as posts that the webmaster could be liable for..I think he deleted 3 or 4 spam messages today..

Your questions and comments are exactly what these boards are for..Come back often and post often..Do not be afraid to share your knowledge with other posters..

[Gary]

On a title 2 FHA reverse mortgage the FHA-HUD regulations state that manufactured home can not have been lived in before home is put on permanent foundation at another location. Is there a way around this? Like asking for FHA-HUD waiver? Or simply applying for loan and hoping the underwriters do not pickup on this regulation. Thank You for any and all info on this subject.