When someone is considering a manufactured home they will often ask if there are mortgage programs available just like with any other type of property and if so are they competitive? The answer is there are several loan options and they’re just as competitive as most any other type of home loan. Manufactured housing is becoming increasingly popular among first time buyers especially as housing prices have rebounded and in many cases are simply out of reach for some. Yet the choices of financing offer options that provide an affordable solution when financing a manufactured home.
Financing for a manufactured home comes from two primary loan types, government-guaranteed and conventional. Government guaranteed loans are those underwritten to guidelines set forth by the VA, FHA and USDA. Conventional mortgages are the most common and are loans using guidelines established by Fannie Mae and Freddie Mac.
VA loans are available for manufactured homes. VA loans are available for honorably discharged veterans and active duty personnel with more than 180 days of service. Those with at least six years of service in the National Guard of Armed Forces Reserves are also eligible. Surviving spouses of those who have died as a result of a service related injury may also qualify. VA loans require no money down and have reduced closing costs, making the program ideal for those wanting to close on a manufactured home with as little cash as possible.
FHA loans are also an option for a manufactured home and while there is a down payment requirement it is only 3.5% of the purchase price. The down payment and closing costs may also be paid almost entirely by a qualified third party such as a family member of non-profit agency. USDA loans can also be used for a manufactured home and require no down payment. Borrowers using a USDA loan can finance 102% of the sales price of the home, allowing for much of the closing costs to be rolled into the final loan amount.
Fannie and Freddie also allow for manufactured housing and offer loan programs with as little as 5.00% down. These loans are better suited for those with down payment of 20% or more due to the requirement for mortgage insurance on all conventional loans with less than 20% down.
With all types of mortgages there is also an option for a fixed rate or an adjustable rate mortgage over varying loan terms. For those who think that financing a manufactured home is expensive and hard to find, they really need to speak with a mortgage company with experience financing manufactured homes. There are plenty of competitive options out there.