Buying and financing a manufactured home isn’t really any different than buying any other type of primary residence. Yes, there are a few things that are different, primarily making sure the manufactured home is built to proper specifications as well as the foundation and attachment is up to lender standards, but beyond the structure, purchasing a manufacture home is easy once you know what to prepare for.
First, how is your credit? If you’re not sure about your credit report, you can get a free one provided by the three credit repositories of Equifax, TransUnion and Experian at www.annualcrediteport.com. Different lenders may have different credit score requirements but most will accept a credit score of 620 while other lenders will accept even lower. For instance, FHA guidelines don’t ask for a minimum credit score but lenders can set their own standards as long as the lender has documented a decent credit history.
You can finance a manufactured home with a down payment of 3.5% for an FHA loan and if you’re VA eligible, you can finance a manufactured home with zero down. There are also conventional options for you but the government-backed VA and FHA loans are probably your best choice if you want to finance a manufactured home with as little down as possible.
Closing costs will be divided into two categories, recurring and non-recurring costs.
Recurring costs are those you will pay again and again over time, such as mortgage interest, property taxes and insurance. Non-recurring closing costs are one-time fees associated with obtaining a mortgage. In addition to your down payment, you’ll also need funds for these charges. Your loan officer can provide you with a closing cost estimate at your request for no charge. You can be expected to provide your most recent bank statements showing you have enough cash available for your down payment and closing costs.
Finally, you’ll need to show you can afford the new purchase. Lenders will compare your gross monthly income with your new mortgage payment, including property taxes and insurance along with any other monthly credit obligations such as a car payment or minimum credit card payments. You’ll be asked to provide your most recent pay check stubs covering a 30 day period as well as your most recent W2 forms from the last two years. Lenders want to see a two year employment history unless you’ve recently graduated from school or discharged from the armed forces. If you’re self-employed or rely on self-employment income to help pay the bills, your two most recent federal income tax forms will be reviewed documenting the additional income with both a two year history and consistent, year-over-year earnings.
That’s pretty much about it. It’s not scary at all, just complete the application and provide your documentation. Your loan officer can review your documentation upfront before you ever start looking at manufactured homes and even provide you with a preapproval letter for you to have, allowing you to look for the right manufactured home knowing your loan has already been preapproved. Now, go buy that manufactured home!