Real Property versus Personal Property~Mobiles and Finance

There have been a few times this year that I've come across issues with agents and clients over the distinction between Real Property and Personal Property when it comes to mobile homes. In the eyes of many, mobile homes are just that...homes!

But, there is a clear distinction between a mobile home that is eligible for Real Estate Financing, ie: a home loan, and one that isn't...What is it? Whether the dwelling is PERMANENTLY FIXATED TO A FOUNDATION!

If a bank is going to lend money on a mobile home, the mobile home MUST BE fixated to a foundation, period! Why? It's simple, the bank is loaning money on the home. In the event that the homeowner decides not to make payments on the home, the bank wants to make sure that they can foreclose on the home to recoup their money and/or possible losses. If the home isn't permanently fixated to a foundation, what's to say that the borrower doesn't pack their bags, hop on the wheels and run for the dickens? So, here is the difference...

This is an example of a mobile home that is fixated on a foundation. The underwriter will look at the appraisal to make sure that the home is fixated to the property and by what method. As a sidenote, even though it isn't part of the topic, be sure to confirm that the ID number on the dwelling runs hand and hand with the paperwork!

This is an example of a home that is sitting on a foundation, but...it isn't fixated to the property. Notice the wheels below the home! Yea, banks don't like that :)

So, if you're looking to list or purchase a mobile home, be sure that the property is going to be fixated to a foundation like the property above before you list it or purchase it and plan on getting Real Estate financing against the property.

Scott Gormley
Broker/Owner
Oak Valley Mortgage
2006 Chico Assoc. of Realtors Affiliate Chairman
Direct: 530.592.8362
Fax: 530.267.5555
Website: http://www.CALoan.com

Blog: http://activerain.com/blogs/lendingmagician

"You find the perfect home, we'll find the perfect loan!"