Loans are simply harder to get these days if you live in a manufactured home and harder still if that home is a singlewide. In many ways the manufactured home owner is treated as a second class citizen by the lending industry, probably because some of the misconceptions about the quality of construction and the negative perceptions created in the aftermath of major disasters (like a tornado or earthquake). And then there is the fact that many investors still consider manufactured homes “trailers”, viewing the residences as temporary structures which can be hauled off in the middle of the night, thus making the borrower and the home a flight risk. The singlewide home obviously provides the best comparison to the trailers of yesteryear so is often the greatest target of derision by lenders. Adding to the confusion is the fact that manufactured homes can either be titled as personal property or as real property. If it is titled as personal property, it is in essence in the same classification as a recreational vehicle and most lenders don’t feel they have an adequate security interest. (more…)

Park communities represent the most popular setting for manufactured homes. For loan purposes, lenders generally require that the owner of the home also own the land upon which the home sits. Until recently the park also had to be classified as a owner-owned Subdivision or a Planned Unit Development in order for manufactured homes to qualify for FHA-insured loans.

Many mobilehome parks and manufactured home communities began as land lease developments but as residents desired a greater control over their living situation and costs associated with their residences, many parks converted to resident ownership. Most of these used the process of the condominium conversion. Unfortunately, because of the classification, this property type was ineligible for FHA-insured loans including Reverse Mortgages or HECM. Fortunately, the Housing and Economic Recovery Act of 2008 (HERA) granted authority to add individual manufactured housing units located in condominium projects to HUD for FHA insurance but the process from Congressional authority to actual loan processing is still unraveling. (more…)

What’s the Difference Between a Personal Loan and a Mortgage Loan?
Manufactured homes are an interesting animal to be sure.   It is the only form of housing that can either be classified as Personal Property or Chattel (like a car) or Real Property (like a regular site-built home) and how the distinction is determined can be confusing.   To be considered real property, the owner of the manufactured home must also own the land upon which the home sits.   Even when the homeowner owns the land, he/she may choose to title each separately—the home as personal property and the land as realty.   However, if one wants to secure an FHA-insured mortgage loan, the home and land must be conjoined as a single entity as REAL PROPERTY.  There is the old joke with lenders that you’ll pull your “trailer” out in the middle of the night and haul it down the street and the will be left holding the bag. The truth is that until the home is titled as real property, your manufactured home will be treated just like a car in the eyes of a lender. (more…)