Are we all sunk by the new lending guidelines?

[Rian]

Does anyone know when the proposed Fanniemae lending guidelines are going to go into effect, and will it also apply to land home packages or only on rented land. The 65% loan to value ratio will make it impossible for most people to qualify for a manufactured home. The extra 1/2 % more in interest required is just rubbing salt into an open wound. So far my lender has not been informed of the changes and is proceeding with the low interest loan. Has anyone else heard anything official yet?

[rmurray]

Details are a little unclear yet...but...

NOT nor has it ever been recommended to only 65%...I hear the new proposal will restrict Fannie Mae loans to no more than 95% ltv...with land having to be seasoned for at least 1 year (Freddie Mac went to this requirement about 10 months ago)...That means no 97% deals with Fannie Mae...but...we have not done one of these in a long while since FHA 97% loans have much lower mortgage insurance fees...I am not happy with the 1/2%....but this is more because the average loan amount is lower for our homes than stick builts in general...It makes sense that smaller loans will be slightly higher rate..Servicing costs are the same..no matter the size of the loan..example..a billing statement costs the same if the payment is $450 or $1450...but the high laon generates more cash to pay these expenses..

I wonder why everyone thinks the sky is falling...Fannie Mae is only 15% of all mortgages...There still is Freddie Mac (about 10%), FHA, VA and many non-conforming products out there..

We will have to verify downpayments..we will not be able to use "instant" equity...unrealistic appraisals...but in most parts of the country that has already happened with the tightening of appraisal rules about a year ago..

If you are selling a product you can be proud of...look for the good things...Know you are selling a better home than most can buy from a stick builder...know you are saving the customer tens of thousands..money they can use on other things in their lives...

The business has changed...It will always change...Thankfully many of the slick folks that used to be in the business have moved on...Hopefully the rest of us will stop the scam artisits from soiling the rest of the lenders in our business...

Good Luck...sell a home today..I did

[Janet]

Has there been any change lately (improvement)in the financing available for mobile homes in parks?

[Sandy]

I haven't heard of any changes in regard to manufactured home loans on rental lots and/or communities. As I do work for a local bank, I will post something if I ever do. While in some ways it's not fair, there is stigma with loans made for manufactured homes on rental lots. At the banks standpoint, the loan is a riskier investment due to the disadvantages of depreciating home values versus putting one on a land/home package and qualifying for a mortgage loan just like a stick built home. The latter has a high probability of actually increasing in value. Of course that's like anything, it does depend on a variety of issues. Honestly though, I've not seen one that didn't increase at least to some degree when placed on real property. When a home is financed home only with no land, it is more or less lumped in the same category of buying a car...boat...and etc. The rates will always be higher versus the mortgage loan. Even at that, the rates will be higher than the typical installment loan due the the fact home prices are higher, and have to be financed for longer periods of time than a typical car would be financed. This gives the loan a more likely chance of being a possible loss for the bank as the home decreases in value like a car due to it not being on real property, and an increased risk to the bank if the loan is defaulted on at some point. When or if this ever happens, there is a real possibility the bank will take a loss trying to sell the home then as it's depreciated. Due to this factor, I really don't ever see lenders easing loan requirements for home only loans. I know this is probably what those in communities or are looking into communities don't want to hear, but it's from a bankers standpoint. Whether we like it or not, that's the way they have it set up. I've been looking myself for a home for over a year now trying to figure out what to do. While we can't really afford a conventional home, it's getting increasingly harder to find a place to put a manufactured home. Due to the factors mentioned before, we won't look to put one in a community. It's been hard enough trying to find the right home, we don't want to complicate matters with trying to get someone to lend to us favorably. I work for a bank, and I don't think it's fair. Then you run into problems with finding property that doesn't have restrictions on it (it's awful here), the property is on a hill side, or is $$$ when you do actually find something nice. Honestly, we're almost to the point we've decided to rent for a while, and see what happens. I hope this sheds a little light on the situation. I would say if you can afford it at all, put it on a piece of property. It eases problems with lenders, increases in value, and will be much easier to resell if need be. Good luck.

[Dave Weaver]

The new FannieMae guidelines are really not so new. Many are restatements of guidelines that have been in place for many years. Basically the changes are as follows, 30 year mortgages are capped at a 90% loan to value, but do allow a 5% gift with 5% from the borrowers own verified funds. 95% LTV is allowed on 20 year or less mortgages.

The high LTV products have been discontinued and there is a minimum .500% cost (discount point) in addition to the normal and customary lender charges, loan closing costs and escrow/recording fees.

Cash out refinances have been limited to 65% LTV. Rate and term refinances to the max limit the same as for purchases. FannieMae has discontinued offering the Leasehold Estate program for HUD Code homes. The appraiser now has a new form to fill out.

Keep in mind these changes affect only HUD Code homes not all factory built homes such as UBC/Modular, panelized, sectionalized, etc. Also FannieMae is but one of the "Market Makers" for mortgages, you still have FreddieMac, FHA, VA, Rural Housing and the non-conforming lenders.

As far as I am concerned, I think the announcement is GREAT. I now have one less set of guidelines to worry about keeping up with. I'm structuring transactions to go to one of the other market makers. The other thing I am encouraging clients to do is look at the UBC/Modular homes. They are underwritten and treated the same as any other site built home because they are built to the local or state and UBC building code not the HUD Code.

If you want to get in touch with me go to www.mortgageasap.com/az/1721 and/or send me a email.