The Manufactured Housing Forums

I've been trying to obtain financing for a mobile home on rented land in Maryland, but so far have been unsuccessful. My middle score is 514 and my husband's is 596. We have about $5K available for a downpayment. Aside from the obvious (cleaning up our credit and trying again later), what are our other options?

We have 3 children and would REALLY, REALLY like not to be in an apartment anymore. It also just so happens that all the mobile home parks in our area have a much nicer "atmospehere"; more appropriate for raising a family in my opinion. We've already tried living with family to save money, which is how we ended up right back in an apartment.

We're currently paying $1150 for rent, so we could definitely make the payments on a manufactured home, but no one wants to give us the chance. Does income ($77,500 annually) and current rent payment amount count for anything? I was told that there are no subprime lenders for manufactured homes and that all manufactured home lenders require an absolute minimum score of 600. Is that true? What about owner/seller financing? I've read that this is a good option for folks with not so good credit, but I haven't come across a seller offering it. Any suggestions?

Actually most lenders require 640 score to begin to qualify...Manufactured home only finance is very tough right now...

That said...there might be a lender out there that does sell their own repossessions at lower scores with strong downs like you have...Go to the parks that you might want to be in and ask the manager if there are any repossessed home in the park..ask for details or a referral phone number...

There maybe some individual investors out there that buy homes from individuals and lenders that offer owner finance programs..again..ask the park manager for referals...Some even do lease with option to buy programs..

Finally there are a few sellers desperate to sell that might carry the loan themeslves...Sometimes they will owe a lot and want to leave the loan in their name..I would be sure the majority of your down ends up as a principle reduction on the loan...and be sure you have legal advice as far as the stricture of the contract...In this case check out ads in the local shopper type paper...drive through the parks looking for signs..

Remember one thing...before you buy from an alternate lender or individual..be sure the park will let you in...some might have their own credit requirements..

Good Luck

We are looking at a new MH on a rented lot (park) in San Jose, CA. We're told by our agent that there are only two banks available for mortgage on this type of housing. We can either go with this bank whose name escapes me at the moment through the dealer or we can go to Bank of the West on our own. I wonder if it's true that there are only two lenders available to us. The interest rate quoted by our agent is 8.5-9%. Home is $170,000, with $65,000 down. Is that a good rate? My husband and I was shocked to learn that the interest rate on a MH is that much higher than a site-built. We are pre-approved for a $300,000 loan on a house at the interest rate of 5.625%. (in a different county) And that's a 20 yr term for MH vs. 30 yr for the house.

First..there might be many more companies available for this kind of loan..large down payments are what lenders are looking for..and many will reward you well...

I know little about CA lenders..but there are many national companies..some can be found through this web site..that would love to have your loan..rates of this kind of loan are credit score sensitive...but the most preferred credit folks are getting closer to 7% with this large of down payment..

Many credit unions will also offer good rates for those with big downs as well..it would pay to shop on your own...enter your info on this web site for offers..call lenders in your area...search this site for lender listings...call them....You might even ask the park manager who finances in the park..they often know more than the dealers..

As far as comparing to a mortgage with land...you probably can get this kind of rate for your manufactured home with land as well...but remember that mortgages have extensive closing costs which effectively means the rate is higher...The closing costs for a 300K loan are probably about $15,000...There is no such fee in manufactured home only loans...just interest..And..of course..5.6% of 300K is over $15,000 interest per year...8.5% of $105K is only $8700 interest per year......I pay my bills with dollars...not percentages..

There are 25 and 30 year home only loans available...just shop around..

ok, i have to tell you please from my present experience here in pa, be leary about where you go to purchase the home and finance. let me just tell you a few things that may or may not help you. first, i have a credit score of 580 i think. bad i know, however, it has gone up bc i have been paying my bills on time for the past 6 months. you can be financed, but at a much higher rate. (im around the 12% area) the problem is, with only 5k down, most likely the banks wont loan you more than 50k, probably less bc of the lower credit rating. however you have something i didnt, 2 incomes, so that will bring your debt to income ratio up to be able to afford a higher mortage. i think you will have a very hard time like i did. i also want you to be aware that most mobile home parks or communities run credit checks and background checks (this is where i ran into trouble) they will not accept you into their community (some of them) if your credit rating is below a certain number, and unlike dealers, they only use one credit reporting agency. im stuck right now with a home and no where to put it. (but im working on that one) please do NOT buy the home even if you are financed without park approval or your own land. setting a foundation can cost upwards to 3500.00 alone and some dealers do not pay for that (as mine does not), but most usually include that in the price, make sure first, and get everything in writing. usually your debt to income ratio cannot exceed 33%, but with less than perfect credit, well we all know how that goes. you could go to a site for mortage caculators, just type in key word - mortage calculator. it should give you a rough estimate of how much home you can afford. its just an estimate bc they dont have things like insurance, and exact interest rates, you key in the rates. im not a professional, and this is only what i believe is true. i would definatly check with someone who knows about these sort of things before you take my word for it. oh some MH dealers do finance themselves, but once again, credit rating, debt to income ratio, and other factors determines amount of loan and interest. the interest rate of 12% really means nothing to me...but when you actually get to the bank and you see the dollar amount you will be paying in interest a year, well thats something to knock you right off your chair if you arent prepared for it (like i was) i was limited to around 40k loan from the bank. by the time im done paying for this home (not on my own land) im looking at around 100k or 60k in interest. oh, just so you know used or preowned or repos not much better unless you have someone with you who knows what theyre doing. repos can be bad bc if the previous owner owes money on that, and you dont know about it you can get stuck paying it, or the dealer may just slide it into the price of the house. (this from experience as well) also, if the mobile home is 10 yrs old most banks will finance for only 10yrs. if they are inbetween they might give you 15 or 20 yr term..if brand new, they could possibly go up to 30 yrs and at a lower interest rate (usually but there are exceptions to every rule, and im still learning as i go) i guess the most important thing is do your research, get a realestate lawyer or bring someone who has background in this sort of thing and who understands all the lingo, get every thing in writing, and have the dealer break down every penny they are charging you. i wish i had done this myself. if you are willing to pay a higher interest rate, you can be financed, it will just take some time. keep in mind in a year you can refinance with the same bank or perhaps another lender. let them compete for the best interest rate. most of the interest is paid at the begining of your loan, so if you can afford to pay more than the actual mortage each month be sure to do so especially in the begining where interest is the highest. there are also grants and loans out there, and with 3 kids, you just might qualify. check with your local government agency. if i were to have moved to the first place i was looking at (before the park denied my based on my credit rating and debt to income ratio) i would have gotten up to 6% of my home cost. you can use that money to build foundation, or even to add to your down payment. if you got approved for a 50k home and have 5k out of pocket money, you could easily double that with govt funding if you qualify. that makes it easier to get approved as well. 10% is usually what is required with "normal" credit. not so good credit..well, here i am dealing with my own issues with that. i hope i have given you some good information. like i said some of it may be wrong, so if anyone out there sees mistakes or misinformation here, please reply, i would not want to give bad advice to anyone. just double check me. good luck house hunting. be patient and aware of things and you will eventually get what you want, or at least what you can afford. (o: peace.

there are lenders out there willing to do MH for that sort of down payment. Check with 21st mortgage in Knoxville, TN

I am a mortgage banker in Phoenix, AZ and I primarily finance factory-built housing. I speak with a lot of people like you in similar situations. Good income and poor credit from the past. In many cases, there is no loan program available to you for a manufactured home. I suggest to my client to consider a site built home or even a condominium. There are many loan programs for borrowers who have the credit and income you described.

One lender in particular will finance 100% of the purchase price with a mid score of 600. They look primarily at your score and disregard any lates or collections (they are already factored into your score). They will also allow a co-borrower with a mid score as low as 500 if they need that co-borrowers income to qualify. This program also allows higher debt ratios up to 50%. You may also qualify for FHA financing. With down payment assistance you could come in with very little down.

You are so close on your husband’s score that I think you should consider going one of these routes. From the rent that you pay know you could afford a home in the $140-160,000 range.

Email me back if you have any additional questions.

Best regards,

Chris