Denver is becoming expensive. For some a bit too expensive which is why they are turning to outlying areas for more affordable homes. Some of the homes located in these areas are Manufactured Homes which have very different requirements than a standard single family home, townhome or condo.
What is a Manufactured Home?
The definition of a Manufactured Home is:
any dwelling unit built on a permanent chassis and attached to a permanent foundation system.
Basically it is a trailer home attached to a permanent foundation.
Sometimes Manufactured Homes and Modular homes are confused. Modular is just a stick built home built in a factory and delivered to the home site and is therefore considered a single family home, with very few, if any, additional restrictions over a standard single family home.
June 15, 1976
In the world of Manufactured Homes June 15, 1976 is a very important date.
June 15, 1976 is the date the Federal Manufactures Home Construction and Safety Standards were established. Since those standards were not in place until that date mortgage lenders are not interested in offering mortgage financing on homes built prior to June 15, 1976. There may be mortgage financing options for Manufactured Home built prior but it would be through traditional mortgage financing channels.
Manufactured Homes Mortgage Requirements
Assuming the Manufactured Home was built on or after June 15, 1976 and you are looking for traditional mortgage financing (FHA, VA, USDA, Fannie Mae or Freddie Mac) there are quite a few rules to be aware of. Here they are for you:
- HUD Compliance Certificate (paper document with manufacturer’s name, model number, etc.)
- HUD Data Plate (metal plate affixed to the exterior of the home)
- The unit must not have been previously installed or occupied at any other site
- Must be attached to a permanent foundation system and meet anchoring, support, stability, maintenance, soil, local code and state code requirements
- Must be permanently connected to septic or sewage system and to other utilities to meet local and state requirements
- Must be legally classified as real property (auto title has been purged)
- Towing hitch, wheels, and axles must be removed
- Land where the unit resides may not be leased or rented
- Minimum size requirements (400 sq ft for FHA, 600 sq ft for Fannie Mae & Freddie Mac)
- Property may not be purchased as an investment property
Those requirements listed above are for all mortgage product types. In addition to those listed above additional requirements may exist on each product and/or each mortgage lender. Here are a few notable restrictions or requirements:
FHA requires a Foundation Certification to be completed on the home at some point in time. If a Manufactured Home is being purchased and a Foundation Certification has not been done or can not be located a new Foundation Certification will be required to meet FHA requirements. At the time I am writing this the estimated cost of a Foundation Certification is $500.
USDA no longer provides mortgage financing for Manufactured Homes although there are some exceptions. If you have a USDA mortgage on a Manufactured Home you may refinance your existing USDA mortgage into a new USDA mortgage. If you are purchased a new construction Manufactured Home you can obtain USDA mortgage financing as long as you meet all of the requirements available for download here.
Although all of the mortgage products allow for the financing of a single-wide manufactured Home very few mortgage lenders offer financing on single-wides. If you are looking to finance a single-wide be sure to inform your lender and see if they provide such financing options.
I started out writing about how Manufactured Homes are typically located in areas outside of the Metro area. Because of this appraisals can take some additional time and cost a bit more.
At the time I am writing this appraisals are currently running about 2-3 weeks from order date to receiving the completed appraisal. For areas outside of the Metro area that can expand to as much as 4-6 weeks depending on location.
In additional to extra time there are sometimes additional costs to go outside of the Metro area on top of the typical appraisal fee. In some cases those fees can as much as the appraisal itself.
Plan ahead for the additional time and cost when appraising the Manufactured Home as part of the mortgage process.
No one knows what the future holds but sometimes the past can be a predictor of the future. Well, over the past 10 years or so the requirements and restrictions on Manufactured Homes have increased making it more and more difficult to finance these homes. Consider this when making a Manufactured Home purchase. Not only will you be required to meet all of the requirements mentioned but when it comes time to sell, the buyer of your home will likely be required to meet those requirements and, likely, some additional requirements not yet put in place.