FHA Part Three - Manufactured Home Loans

This is Part Three in my series on FHA Real Estate Loans and some things that home buyers and home owners may not be aware of. Today, I am going to discuss the purchase and refinance of manufactured homes with their own land. Manufactured homes on leased land are not eligible for FHA loans in my lending area of Oregon, Washington and California. FHA loans, except for streamline refinances are limited to owner occupied primary residences only.

First of all, what is a manufactured home? A manufactured home is one that is built in a factory and transported to the home site in sections. This differs from a modular home that is built on site from factory built pieces, i.e., walls, roof, floors, etc or a site built (stick built) home. It can be single wide or multi wide and still be financeable with an FHA loan. It must have been built after June 15, 1976 and have a concrete foundation and tie downs. For a 203b loan, foundation and/or tie downs can be retrofitted prior to closing. For a 203k loan, both must be in place prior to approval.

Purchase transactions for manufactured homes are available with a minimum of 3.5% down, (I will be using 2009 rules) unless you are using a 203k, 203h or an energy efficient mortgage and then 3% is the minimum down payment required. Cash out refinances are available up to 95 percent loan to value (LTV) if the home has been owned for at least 12 months. If the home has been owned for less, then the loan is limited to 85% LTV. Rate and term, either streamline cost or no cost, are not as limited.

Here are some other quirks that can and cannot be done:

•· Two manufactured homes (M/H) on a single lot are acceptable. (both must meet requirements.)

•· M/H with "stick built" additions are not acceptable.

•· M/H located in PUDs (planned unit developments) are acceptable.

•· M/H located in condominium projects are not acceptable.

•· M/H located in a flood zone are not acceptable.

•· M/H may not have been moved from original site location are not acceptable. (Only Federal VA loans will accept any M/H that has been moved.)

OK, that is the basic run down. Important information for this installment, are that single wide manufactured homes can be financed using FHA insured loans, homes must be newer than June 15, 1976 and cash out is available through FHA on manufactured homes. Lastly, if the manufactured home is located in a flood zone, it is probably better to put pontoons on it and try to get a floating house loan.

Check out Part One and Part Two.

authored by Fred Chamberlin, senior mortgage consultant, Eugene/Springfield Oregon, 541-342-7576