A complete guide to buying a manufactured home
The terms mobile home and manufactured home are massively interchangeable, even though there is a subtle distinction between the two. Mobile homes were first built before the 1970s. Meanwhile, manufactured homes were built after the mobile homes.
But why? Wasn’t a mobile home convenient enough for a living? Well, it was an excellent place to live. But it required better quality enhancement.
When planning to build a manufactured home, you are not only securing the quality of living. You are also securing better financing, finding a good location, and overseeing installation.
In this blog, we will discuss and explore how you can buy a manufactured home to find an affordable option tailored to your needs and preferences.
Other than that, we will also explore why we should choose a manufactured home, along with the cost of buying a manufactured home.
What is manufactured home?
A manufactured home can be a good option If you have a single family. A manufactured home is specially built for single families. Mainly, factories build these homes in a closed environment, under professional supervision.
These manufactured homes are also known as mobile homes. However, there is only one difference between mobile homes and manufactured homes: the year these two were built.
Mobile homes vs. manufactured homes
Mobile homes can be relocated very easily. Thus, these specific home types were considered vehicle tax and zoning purposes. The mobile homes were built before 1976.
On the contrary, manufactured homes were built after 1976. You can move to these homes only once. The manufacturers build this manufactured home on a steel chassis. These also have wheels you can detach once you tow the home to its location.
Manufactured homes are another better version of mobile homes. The main aim was to abide by the Federal manufactured home construction and safety standards, also known as the HUD code.
The manufactured home has various features that a traditional home contains. These include:
- Fiberglas insulation,
- Porches
- Exterior stairs and many others
Recently, the newer models also started to include covered porches and garages. These features have added more convenience to the manufactured home.
The price of a manufactured home is typically lower than that of traditionally built homes. These types of dwellings mainly attract rookies and young families.
If you do not have the monetary resources to live in certain areas or can afford a specific type of home, then the manufactured home is an excellent option for you.
You just must find a place in a community and pay a small fortune to buy an affordable home that can provide you with a traditional home-like experience.
How to buy a manufactured home?
Many areas have restrictions and regulations for manufactured home structures. If you plan to buy a manufactured home, first, you must check whether the area has any local zoning restrictions.
There can be restrictions related to land usage, the size of your manufacturing home, or even preventions to stop using your manufactured homes for business purposes.
Other than that, you must evaluate the property. This can help you understand the ease of reaching the location. The evaluations also help you to find out the legal requirements. Additionally, it also keeps you informed about the soil quality or how much time you may need to get the foundation ready for use.
On the contrary, if you are interested in buying land for regular living, you can explore the residential areas. However, if you are looking for more open spaces, remote areas can be an excellent option.
Now, let’s talk about the financing part. A variety of financing options are available for buying a manufactured home. You may find various mortgages or government-backed loans to help you buy a manufactured home.
Only some of us always have a significant amount of cash to buy land or property. There can be instances where you need loans or mortgages to cover the entire cost.
In the following section, I will discuss different loans to help you pay for a manufactured home.
Types of loans to buy a mortgage home
Even though buying a manufactured home can be less expensive, the process also includes associated costs. As a result, the overall expenses may go beyond the purchase price. There are factors such as:
- Delivery fees,
- Home installation fees,
- Utility costs
- Home Insurance
- Property taxes, etc.
Adding these to your purchase cost might cost you a small fortune. But don’t worry. There are a few loan options available to cover your overall expenses. Let’s find out…
Conventional Mortgage
Do you know mortgage loan can help you buy a manufactured home? Yes! You heard me right! You can apply for a mortgage loan. But there is one condition. You must consider your property as real property.
There are more conditions that you must follow, such as,
- The manufactured home must be 400 sq. ft.
- It must stay attached to its foundation.
- It should contain all the amenities you need for living, such as eating, sleeping, and even sanitary facilities.
There are two types of conventional mortgage available for buying a manufactured home:
M.H. advantage program
This is an innovative option for homeownership. It offers affordable financing for your specially designed manufactured homes.
You just need to make a down payment of around 3%. Along with that, it also provides you with a lower mortgage loan compared to the other mortgages.
However, there is one condition: you must maintain a credit score of 620. This way, you can qualify for the M.H. Advantage program.
There are only a few properties that are eligible for the M.H. loan. They receive the “M.H. advantage” sticker attached to them.
CHOICE Home Program
Freddie Mac is a famous finance company that offers conventional mortgages for manufactured homes under the CHOICE Home Program.
You just need to make a down payment of 5%. However, you must have a good credit score.
You can use the CHOICE Home Program for primary and secondary programs. The investment properties do not qualify for the program.
Government-backed loan
You can also opt for a government-backed loan program besides conventional mortgage. If your manufactured home is considered a genuine property, it might qualify for the U.S. Department of Veteran Affairs or V.A. loans.
You can use the V.A. loan for various purposes, such as:
- Refinancing or buying a manufactured home.
- Refinancing or buying a manufactured home along with the land
- Buying and improving the mobile home based on your needs and desires.
- Refinancing a manufactured home while planning to buy the land as well.
Other than V.A. loans, the USDA Loan or U.S. Department of Agriculture also finances home loans. However, there are a few conditions that you must take into consideration:
- Your manufactured home must be real property.
- The property should be 400 sq. ft.
- It should be appropriately fixed to the foundation.
- And lastly, the property should be less than a year old.
Now, if your manufactured home is wheels, it is not considered a real estate property. As a result, you will not be eligible for the above loans.
Dealer Financing
There can be instances where you can arrange the financing directly from the person or the dealer you are buying from.
Let’s say you are buying a manufactured home through a dealership. In that case, you might get financing options available from their end.
If you plan to buy your manufactured home from a private seller, they can help you with financing. However, ensuring that the loan terms and conditions are clear and transparent is also necessary.
This way, you can avoid any unnecessary confusion while signing the paper.
Wrapping it up!
Buying a manufactured home requires a lot of consideration. You must determine where you want to put your home, which type of loan can suit you, and how you will prepare your land.
So, take your time and research carefully. The above information and loan types help you to understand what aligns with your needs.
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