The Manufactured Housing Forums

I read your article last week on new FHA TYPE I loans for manufactured homes including those on leased land. When I ask this question to several manufactured home communities in Florida none will respond. Do you know why?

You may not have been getting a response to your inquiries because you used the wrong name, or perhaps the communities were just ignorant of the program. It's called the FHA Title I finance program, as contrasted with the older better known Title II program which is for m/h and conventional homes in land-home packages

Although the program as been around for many years, it has languished for the last 10 years or more, and was only recently revived with new features which went into effect on June 1, 2009. I am sorry that many of the community owners/retailers you spoke to don't know about it yet. They will soon.

You also didn't say whether you were buying a new or a used home from the community, a retailer, or a homeowner. The procedure is different for each. If you are buying a home from a homeowner, you will need to go directly to a lender.

If you are buying from a community owner or retailer, they must first be qualified by a lender. Down payments are 5% if your credit score is above 500 or 10% if below. Each lender establishes their own credit underwriting, interest rates, and fees. If the home is used, and you are buying from a homeowner, you will have to pay up front for an appraisal. Lenders also may not assist you with the down payment, but may pay some of your other loan fees and costs.

Some of the lenders who either currently making these loans or will be soon are: 21st Mortgage, CIS Financial, Vanderbilt, Tammac, and DSC Mortgage.

If the home is new, the loan amount is based on the retailers costs which include an "advance" formula. If used, you must get a value determined by an appraiser who is certified to use the NADA appraisal system.

Loans terms may be for 15 years on singles, 20 years on doubles, and 25 years if the land is included in the purchase price. Loan maximums for home on leased homesites only are limited to $69,678 and with the land may be as high as $95,978.

Leases must initially be for a minimum of 3 years, with year to year extensions after that.

I am working on a book which is to be published in the fall which will cover many of the program features, for home buyers, and for retailer/developer/community owners.

Edward Hicks
www.factorybuilthome.com/
www.mobilehomepark.com/
"Ask Eddie" in the Journal
of Manufactured Housing.

hello all!

I am new here so please disregard if someone has already asked this question. But, I would like more information on this Title 1 financing program. Can it be used to purchase a pre-owned mobile in a leased community?

thank you.

Yes. Although the program officially went into effect on June 1, 2009, HUD is completing final program modifications which are expected on or before Mid November 2009, and may be found at:
http://www.hud.gov/offices/adm/hudclips ... /index.cfm

A brief summary as of Mid September 2009, prior to the final update, the program’s primary application to sub-divisions, condominium, and LLCommunities will be three fold:

1. Financing residential homesites only up to $23,226 for 25 years
2. Financing home and residential homesites up to $93,226 for 25 years
3. Financing new or used homes on leased homesites in LLCommunities up to $69,678 for 15 years if single section, or for 20 years if multi section.

Down payments are 5.0% of the total purchase price if the borrower’s credit score is over 500 or 10% if under. Interest rates are determined independently by each lender, based on costs and risks as determined by their underwriting staff. Some derogatory credit is allowed.

Retailers as vendors for new or used homes must be pre-qualified for minimum net worth and equity by the lender for each sales location.

Borrowers must evidence the source of the down payment, which may be gifted but documented, but no part of the down payment may be paid by the retailer or seller.
Loan origination fees are 2.0% of the total purchase price, which may be financed if the total does not go over the maximum loan amount. The first year’s insurance premium may also be included in the loan.

Loans may include home sales price less any returnable components such as wheels, axles, and tongues, plus sales tax, transportation and setup costs, skirting (underpinning), steps, air conditioning, and other attached accessory structures such as awnings, screen rooms and raised porches (if allowed to remain on the homesite upon resale by the LLCommunity owner) plus license fees, sales tax, and other government imposed costs or fees. Furniture and appliances other than factory installed standards and options may not be included in the loan.

Loan amounts for retailer sales of used homes built after June 1976 to the HUD Codes are based on 95% of an approved NADA type appraisal of the home. Individual homeowners may also refinance their occupied homes based on the same type of appraisal. Sellers of homes may also apply direct to the lender for loan approval, using a pre-paid NADA type appraisal.

Fee simple homesites must be pre-approved by the lender, and homesite leases must provide for an initial 3 year lease term with annual renewals (monthly lease payment increases may be allowed). Some lenders may require pre-approval of the LLCommunity.

For a comparison of the FHA Title I program as described here, and the more conventional FHA Title II program for land/home financing go to: http://www.factorybuilthome.com/FHA-Compare.html

Some of the lenders either currently using the program, or anticipating it’s use upon publishing of the revised regulations, and release of the GNMA moratorium are:

21st Mortgage, Knoxville, TN (800) 955 0021
Vanderbilt, Mortgage, Knoxville, TN (800) 970 7250
CIS Financial Services, Hamilton, AL (205) 921-4814
Tammac Credit Services, Wilkes Barre, PA (800) 326-9243
DSC Financial Services, Portersville, PA (800) 642 0788

Edward Hicks, Lic. Mortgage Broker
Consultants Resource Group, Inc.
[email protected]
www.mobilehomepark.com/
www.factorybuilthome.com/
www.interlokhome.com/