Florida Mobile and Manufactured Home FinancingWe finance manufactured homes which are often still called mobile homes.
Florida mobile home financing or manufactured home financing.
First thing is first, technically a mobile home is a factory built home that was constructed prior to June 15, 1976. Even so people still today call newer manufactured homes mobile homes. The terms people use can change depending where you live but in Florida people often use the term mobile home for manufactured homes constructed after 1976.
A manufactured home is a factory built home constructed to the HUD Title 6 construction standards that took effect after June 15 of 1976. If it is a manufactured home built to HUD code there will be two forms of verification, a certification label and a data plate. The data plate will be located somewhere inside the home, often near an electrical box, the main thing is it has to be easily visible. You can find the certification label on the tail end of each transportable section of the manufactured home.
There are some nuances to financing a manufactured home but we are here to guide you through the process.
How important is the certification label or HUD Plate?
Its actually against the law to remove them, the appraiser will need to find them when purchasing a manufactured home. HUD states that if the certification label or HUD tag is missing from the manufactured home, they do not reissue labels. They can however issue a Letter of Label Verification for homes for which it can locate the label numbers on a data plate. This can be found inside the home in one of three spots: in a kitchen cabinet, in a bedroom closet, on or near the main electrical panel. The data plate will have a map of the U.S. to let the consumer know the wind zone, snow load, and roof load for which their manufactured home was constructed for. When an appraisal is done for the purchase of your home or the selling thereof, they will look for all the necessary information, so don’t feel overwhelmed. If there is an issue the lender will the take necessary action to resolve any issue.
Its possible to request a Letter of Label Verification from the Institute for Building Technology and Safety (IBTS). You can call them via phone at (703) 481-2010 or fax them at: (703) 437-6894.
Tie Downs and Other HUD Guidelines
Tie downs being up to current code is the biggest issue we run into when borrowers choose to buy a manufactured home. On October 20th of 2008 HUD increased the size of the requirement for the knuckle on the tie downs that attaches to the manufactured home or what a lot of people still call mobile homes. This means that if the manufactured home was anchored before October of 2008 there is a good chance that the tie downs will not be up to current code. When you purchase a manufactured home an engineer is required to come out and inspect the home and make sure that it is up to code unless you are using conventional financing.
If the property has changed hands since 2008 and the purchaser used a conforming loan then it should have been retrofitted to current standards. Additionally the engineer will inspect the siding around the bottom of the home making sure that there are no holes larger than an inch. Preparing for this inspection beforehand is always smart because a hole in the siding is easily remedied with spray foam. Its always best when the listing agent for a manufactured home preps the seller for the possibility that they may need to pay for their to be retrofitted if it was anchored before October 20th of 2008.
As a lender I always try to set up the possibility to everyone involved in the transaction of this needing to be done in order to sell or buy a manufactured home. If a borrower is using FHA, and VA financing the inspection will be required. The only way out is to use conventional financing. The cost of retrofitting can range anywhere from $1,200 to $3,000, I’ve seen a pretty wide range of quotes depending on the size of the manufactured home. Its important to remember that an escrow hold back is not allowed for the cost of retrofitting the property.
You can use conventional financing to purchase a manufactured home with as little as 5% down with p.m.i. (private mortgage insurance). You can also use conventional financing to purchase a second home with as little as 15% down. The HUD guidelines of October 20th of 2008 apply to conventional financing along with FHA and VA financing. A cash out refinance is possible up to 65% of the value of the manufactured home. For conventional financing we no longer require an engineer to inspect the tie downs or skirting!
We offer FHA financing for a manufactured home. The minimum down payment is 3.5% and you must occupy the home as your primary residence. Just like conventional or VA financing the property must be up to current manufactured home HUD guidelines. Its important to note there are rules for the distance of the septic, well, and drain field from the property line. The well must be 10 feet from the property line, 50 feet from the septic tank, 100 feet from the septic tank drain field. However this can be reduced to 75 feet if allowed by local authority. If the subject property line is adjacent to residential property then local well distance requirements prevail over the guidelines. If the property is adjacent to a non residential property the minimum is 10 feet still.
Veterans can use their VA entitlement to purchase a manufactured home with no money down! Keep in mind that when purchasing any home that has a well the VA requires both a bacteria water test and a lead water test. Technically the veteran is not permitted to pay for these out of pocket. Frequently inspectors will allow for them to be paid at closing if there is a problem with the seller coming up with the funds to pay for the VA required water tests. An engineer will be required to inspect the property just like FHA or conventional financing to make sure that the manufactured home meets the current HUD guidelines.
Our Manufactured Home Guidelines
- Both MFH and land must be titled together and classified as real property.
- Primary and second homes only (no investment)
- Double Wide homes only (Single wides are ineligible)
- MFH homes that have ‘moved’ once built are ineligible.
- Towing hitch, wheels and axles must be removed.
- Minimum of 600 square foot living area required
- Must be affixed to a permanent foundation.
- MFH’s built prior to June 15th, 1976 are not eligible.
- Appraisal form 1004C must be used and must clearly reflect a photo of the HUD Certification Tag.
- Land must be owned as Fee Simple. Leaseholds and MFH Condo lots are ineligible.
- DU/DO is the only allowed AUS. AUS approval required. DU must clearly indicated the structure as a Manufactured Home.
- Min 620 FICO
- Maximum LTV—Follow agency guides.
- Maximum 85% LTV allowed Second Home
- For LTV’s above 80%, borrower must have 5% of own funds into transaction.
- Structural foundation certification not required unless the appraiser notes issues or requires such a certification.
- Structural engineer certification only required if changes to the original structure were made (such as added porch or roof line) or if the appraiser notes issues.
Please note that due to lending restrictions and secondary market appetite its very difficult to finance a manufactured home under $80,000.