Obtaining a mortgage is an essential step toward buying a new home, but options for factory-built homes can seem limited, and the details can sometimes be confusing. At Peter’s Homes, our team is experienced with current options and resources available for manufactured home financing, and we can help you make sense of it all. We’ll help you find a factory-built home loan that’s right for your particular financial situation, and make sure you’re able to do so without delay or unwanted stress. Here at Peter’s Homes, it’s our goal to help you get a great deal on a new home you love.
The Right Loan For Any Purchase
HOME ONLY FINANCING
Manufactured homes can be financed in much the same way as a personal property loan, or a Chattel loan. This loan is designed for customers moving into manufactured home communities where they will lease their lot instead of purchasing one. The home is the only collateral on this type of loan. You can still finance your exterior improvements (carports, decks, steps, etc.) as part of this type of loan. Because this is a loan on personal property not on real estate, interest rates are slightly higher than a typical real estate loan. However, there are few or no closing costs, and no prepayment penalty for early pay-off in part or whole. This also makes an excellent “bridge” loan for customers who need only short term financing. There are several “industry lenders” who fund these loans.
Unlike Home Only financing, Land/Home loans are normally the same as loans on stick-built, conventional homes in terms of interest rates and down payment requirements. This type of loan includes the cost of the home, land, and improvements to the land. You can finance a garage along with your foundation, septic system, land clearing, or more. You can pick which type of Land/Home loan you need: conventional, FHA, or VA. You can also choose your lender. As these loans are typically more complex than similar loans on an already existing home, we suggest you choose your lender carefully. Ask them how many of these loans they have made from start to finish. We suggest you consider paying a little extra to make your Land/Home loan a “construction” loan. This way, your site contractor can receive draws like a builder, rather than waiting until the very end to receive funding. Some Land/Home loans don’t have this “construction/draw” feature, so check with your lender. You should see a slight reduction in your site contractor’s bid by using a “construction/draw” type loan that typically offsets any extra loan fees.
FHA & VA HOME FINANCING
If you’ve had some past credit challenges, but you currently have the ability to repay a mortgage, then FHA manufactured home loans present an excellent opportunity. In many cases, these home loans carry lower credit score and down payment requirements than conventional home loans—this means credit challenges in the past, or a lack of established credit, will not automatically deter you from obtaining an FHA home loan. The VA offers factory-built home financing to active duty military, veterans, and their spouses. As with FHA loans, VA home loans have lower credit requirements, but they carry significant additional benefits too—you may be able purchase your new home with no money down, you won’t need to make monthly PMI payments, and the home appraiser is selected independently by the VA, which means the lender has little or no control over the appraisal process.