Tammie Jungling, CPMS®

With all the changes in mortgage financing, questions have been asked lately on what is available for Manufactured Homes. I've investigated the parameters allowed by Wells Fargo. Although the parameters are getting tougher I found that we still offer financing on Manufactured Homes.

There is confusion on the classification of a Manufacture Home because it is considered a Factory Built Home. A Factory Build Home is a general term that is used to include prefabricated, modular and manufactured homes. Here's the description of each home:

Prefabricated Home: Completely assembled at the factory and moved to the site either in its entirety or in sections. This type of home is not subject to the stricter guidelines of Manufactured Homes.

Modular Home: Built from factory assembled components. It is typically constructed off site in sections, moved to the site for assembly and attached to permanent foundation. This type of home is not subject to the stricter guidelines of Manufactured Homes.

Manufactured Homes: A manufactured home is defined as a one-unit dwelling that is built in a factory on a permanent frame or chassis. The units have wheels, axles and brakes that are removed after transportation of the home to a permanent site. The unit must be built after June 15, 1976, is constructed in accordance with the National Manufactured Construction and Safety Standards Act as published by HUD, must be permanently attached to a foundation, and be classified and taxed as real estate.

The following manufacturer builders are experienced and well known: Palm Harbor Homes (www.palmharborhomes.com), Champion Family Home Builders (www.championhomes.net); Clayton Homes (www.claytonhomes.com) and Fleetwood (www.fleetwood.com). Both Palm Harbor Homes and Champion Family Home Builders also build Modular Homes.

So what financing options are available through Wells Fargo? Many, from conventional financing to FHA and VA financing. Here are some of the specific guidelines to watch for:

Loans Available:

Conventional Financing (FNMA/FHLMC agencies):

Occupancy:

Primary and Second Homes(Purchase & Rate/term Refinance):

• 80% LTV as of April 6, 2009 is the maximum LTV for any manufactured home financed as a conventional loan. PMI companies are no longer willing to issue MI on Manufactured homes.

Primary (Cash-Out Refinance):

• 65% and the maximum term is 20 years.

Products:

• Fixed Rate (15 to 30 years)
• 7/1 ARM
• 10/1 ARM
• Renovation
• New Construction
• Third Party Construction Financing with Modification or second closing

Specific Property Allowances or Restrictions:

• Land plus home only.
• No Leasehold/Co-Op properties.
• No Parks.
• Planned Unit Developments (PUD) and Condo's allowed.
• May be in a Flood Zone.
• The home may never have been moved from its original installation location.

FHA Financing (HUD agency):

Occupancy: Primary Residences Only

Purchase & Rate/term Refinance: Maximum LTV 96.5%

Cash-Out Refinance: Maximum LTV 85%

Product:

• Fixed Rate (15 to 30 years)
• 3/1 ARM
• 5/1 ARM
• Renovation
• New Construction
• Third Party Construction Financing with Modification or second closing

Specific PropertyAllowances or Restrictions:

• Land plus home only.
• No Leasehold/Co-Op properties or Condos.
• No Parks.
• Planned Unit Developments (PUD) allowed.
• Existing properties may not be in a Flood Zone.
• New Construction properties may be built in a Flood zone if the lowest grade level is raised above the flood plain.
• The home may never have been moved from it's original installation location.

VA Financing (VA agency):

Occupancy: Primary

Purchase & Rate/term Refinance: Maximum 100% LTV

Cash-Out Refinance: Maximum 90% LTV

Product:

• Fixed Rate (15 to 30 years)
• 3/1 ARM
• 5/1 ARM
• New Construction
• Third Party Construction with second closing only (no modifications allowed)

Specific PropertyAllowances or Restrictions:

• Land plus home only.
• No Leasehold/Co-Op properties.
• No Parks.
• Planned Unit Developments (PUD) allowed.
• The home may never have been moved from its original installation location.

When searching for financing be specific with the lender on the property type. I have had several customers who, by not asking began their financing with lenders and brokers who could not finance manufactured homes. So be upfront and make sure the lender is absolutely certain that they can do the financing before spending any money for the appraisal.

If you want to learn more about this product please feel free to contact me. I would be delighted to assist you.

WE HAVE MORE MORTGAGE INSURANCE RESTRICTIONS ON OUR HOMES IN FLORIDA! And this is Florida only. Asset Managers and Foreclosure Realtors pay attention.

Effective Monday, March 9th, all attached housing in the state of Florida will be limited to a 80% LTV on conventional financing. Yes, attached PUD's and Townhomes are now too much of a risk for the Mortgage Insurance Companies in the State of Florida only.

Why do I keep saying "In the State of Florida only." Granted there are four states that are, in my opinion, being drastically penalized by Mortgage Insurance companies and FannieMae/FreddieMac. However, Florida seems to be the one state targeted, how do I say, more severely than any other state.

As I stated in a previous blog the Mortgage Insurance companies started with Condo's and limiting the maximum loan amount to 80%. Then FannieMae came out and if the existing project wasn't approved by them they were limiting the maximum loan amount to 75% for primary residences, 70% for a vacation home and 0% for investors.

So where does this leave us for the First Time Home Buyers, you ask? FHA and VA for vets.

The First Time Home Buyers are the ones that are going to revitalize the market. These are the ones who will be willing to take the chance of purchasing a home with the little money they've saved or received as a gift from family members. But money is tight and they don't have the 20% to 25% down to buyer a home. So again the answer is FHA and VA.

So Realtors who specialize in REO educate your Assets Managers on what's really going on in the market. Make sure you have fully qualified buyers with valid offers and sell it to the bank's Asset Manager. I have qualified buyers who are going FHA, either because the need to or they want to keep some money in the bank for repairs and emergencies, but who keep getting their contracts turned down because of the loan program.

Let's sell some homes, reduce the inventory out there, save some money for the banks and earn some money too! We can do it!