Financing for manufactured home

16 years ago

One of the homes I looked at recently was a manufactured home (they call them double wides here apparently) on two acres. Had a two car garage and an above ground pool. It has been for sale for 8 months. The realtor told us that several people have been interested in the home but so far no one has been able to get finacing on it. She said this is because most banks will not give you a loan because it does not sit on a basement. It does not have the wheels and axles on it (sits on a block foundation but I guess this is not considered permanent?) Manufactured homes were big in this area for retired couples and first time home buyers because you could get a brand new "house" for much less than the cost of a stick built home.

The realtor showed us the apprasail the owners had done and the appraisal lists the property value as $120,000. This is much higher than what they are asking for this home. They have done four price reductions. My question is, if most banks won't even loan money on a property of this type, how did an appraiser (who I'm assuming works with banks) come up with such a high figure? The land is definately not worth that much.

For the record I am not interested in purchasing this home (I prefer a stick built house) but I'm just curious how the process would work? Does someone have to pay cash to buy this property or are there different loans available for this situation.

Sort by:Oldest

Comments (4)

dave_donhoff
16 years ago
Hi NHSeeker,

Does someone have to pay cash to buy this property or are there different loans available for this situation.

There's still financing for these, but the buyers need 20-30% down payment if it isn't new-off-the-dealer's-lot... THAT is what the problem is, I am sure.

New installations can be financed to zero down.

Cheers,
Dave Donhoff
Strategic Equity & Leverage Planner
mfbenson
16 years ago
Look at it from the bank's point of view: If there was a risk that some guy you lent money too could move and take the collerateral with him, would you be eager to lend?

A bank would probably have no problem mortgaging the land, but the home would require something more like a personal loan: much higher interest rate, much shorter payoff period.

The more mobile the home is, the worse the financing options will be.
Related Discussions
Selling Older Manufactured Home/Financing
Q
Comments (3)
is this a single wide or a double wide? are you selling it along with the land it is on? 'used' manufactured homes are notoriouly difficult to finance. Especially a single wide and especially one that isn't included with the land. We purchased a used DW on five acres last year - there was also a single wide (used) and it was not even listed on the loan documents. We also paid about 30% down. And, finally, financing is getting less easy to obtain due to the mortgage 'melt-down' in many areas. I truly do not know if I would have been able to obtain financing this year as easily as I did last year. Getting financing on a used manufactured home is rather difficult ..... good luck, Carolyn
...See More
Fsbo on manufactured
Q
Comments (18)
christopherh, Actually, there are several reasons why most lenders won't provide 30-year financing on a property such as you describe. But that nonwithstanding, 2 acres is not considered "excess" acreage. You are wrong that only "uninformed" brokers & lenders question manufactured housing. Rather, on the contrary they ARE informed. This type of loan, statistically, defaults at significantly higher rates than non-manufactured homes on smaller sites. Risk-based lending is just that...a lender considers ALL risks before granting a mortgage secured debt. Manufactured housing frequently depreciates rather than the appreciation non-manufactured housing usually enjoys. Also, the lifespan of manufactured housing is less. It's also a tougher sale. If a lender has to foreclose...getting rid of one of these properties is tough & the lender almost always incurs loss. This issue has been a problem across the country because manufactured housing is also affordable housing. There are some lenders who specialze in manufactured housing but they are few & far between. In New England, the New Hampshire Community Loan Fund is one such lender who has done a lot to increase financing opportunities for families wishing to purchase manufactured housing. They do not, however, lend to speculators or investors. Their programs are geared toward owner-occupied homes. Tricia
...See More
Any advice out there?
Q
Comments (42)
This is one of the worst financial decisions I think I have ever seen anyone make. $100K borrowed at seven percent for a depreciating asset (and that's what a trailer is) is a VERY bad investment. You'll be wasting $240,000, plus the costs of repairs and upkeep over the time you live in this thing, and end up without anything to show for it. We spend part of the year in a winter house in FL, the land of trailer parks, and my DH's parent's friends have recently bought trailers for the winter seasons... They paid under $20K for perfectly nice used double wides and the original owners lost a fortune. You can find SO much on the Internet about why buying a trailer is an abominable investment. Look at Dave Ramsey http://www.daveramsey.com/askdave/posts/120895: When you’re buying a mobile home, they go down in value. From a financial standpoint, mathematically, you’re buying a car that you sleep in—a very large car that you sleep in. When you buy a home, they go up in value. I’m not against manufactured housing, which means a whole lot of different things when you say that phrase. But if it’s the type of housing that’s done in some way that the consumer buying it really doesn’t detect that they took the wheels off of it, then it usually will go up in value. If it looks like a trailer, smells like a trailer, it’s going to go down in value. That’s why I’m against it. Before, when you were paying out X number of dollars in rent, that’s all you were losing. Now you’re paying out X number of dollars in rent and you’re losing money every day on the ownership of the thing, so you’ve done double dumb now. That’s why I tell people not to buy trailers. I would seriously do your research on this before you waste hundreds of thousands of dollars.
...See More
Manufactured homes in California, advice?
Q
Comments (14)
A HUD inspector is irrelevant for anything at all about modulars. S/he has nothing to do with any kind of housing construction except for mobile homes, of which manufactured is a type. The HUD regs are irrelevant to other types of housing, i.e. those that use stick or modular methods. For instance, mobile/manufactured homes require tie downs, etc. (I was involved in writing the HUD mobile home regs.), other homes not, because why would they need to? I'm not sure how it impacts the situation if you have to meet 2 entirely different sets of regulations, as you've explained. Are you sure we're talking the same kind of modular? They put netZero 100% solar modular homes in New York City, for gosh sake, for substantially less than you've quoted as cost.
...See More
pamghatten
16 years ago
Good response mfbenson .... also, like other things that can drive off, these properties do not necessarily appreciate the way a "stick built" house can.

But, you should be able to find an FHA Lender that will finance the property. There are requirements for when they were built and how they are attached to the foundation, but they are doable.
AngieAnders
16 years ago
This is the situation I am in now. We are selling our mobile home and 2.5 acres of land (and even worse, it's a single wide home). It's a nice set-up in a private community, wooded on three sides, huge deck and aboveground pool, carport, well, aerobic system, established landscaping (including my prized own-root rose garden!), goldfish pond, etc etc...

Anyway, it's been shown to 5 different people. ALL FIVE wanted to buy it, but three couldn't get financing, one low-balled us and walked at 80% of our asking price, and this last group just toured yesterday and are talking with their lenders now to see if they can get a loan.

It's such a hard predicament to be in. We have it priced right, it appeals to those who have seen it, but they have to have 20% or more to put down on it before the banks will even consider it. We're over 150 days on the market.

Financing for manufactured home

Comments (4)

dave_donhoff

mfbenson

Related Discussions

pamghatten

AngieAnders

COMPANY

BUSINESS SERVICES

GET HELP

CONNECT WITH US