Manufactured Home Loans In Tacoma

What is a Manufactured Home?

A manufactured home is a prefabricated home assembled in a factory rather than constructed on-site. Manufactured homes were initially intended to be mobile but are now often placed in one area permanently. Contrary to their name, modern prefabricated homes are not necessarily movable and can be set on concrete blocks or tie-downs. They are a more affordable alternative to standard homes.

A manufactured home is a factory-made home built after June 15, 1976. Since 1976, manufactured homes have been subject to US Department of Housing and Urban Development (HUD) rules. Each house must have a HUD label and data plate indicating that it complies with these rules. While there are similarities to traditional homes, one key difference is that manufactured homes often don’t have basements.

Manufactured vs. Mobile vs. Modular

Mobile, manufactured, and modular dwellings are all forms of prefabricated housing. However, manufactured, mobile, and modular residences’ construction standards, mobility, and financing options vary.

When deciding on a home type, you should consider your budget, design choices, and mobility requirements. Importantly, finance choices range across these home types, with modular homes often qualifying for conventional mortgage financing and manufactured homes having distinct financing options.

• Mobile Homes

Mobile homes were prefabricated dwellings on wheels that were popular from the early 1900s until the mid-1970s. They were built before the implementation of new safety requirements in 1976 and hence do not comply with current HUD (Department of Housing and Urban Development) codes. These dwellings can easily be relocated, providing architectural versatility.

• Manufactured Homes

Manufactured homes are modern mobile homes that adhere to strict federal criteria established by the HUD Code in 1976. These homes are built on various foundations such as pier and beam, permanent, crawl space, or basement and may be transferred using specialized trailers. They are available in single, double, or triple-wide widths and have open floor designs. Despite their low cost, manufactured homes depreciate faster than other types of residences.

• Modular Homes

Modular homes, unlike others, follow municipal and state building codes, just like site-built homes. They are built in sections in a factory before being completed on-site on a solid foundation. This type of home is not transportable after assembly and comes with a variety of customizing options as well as energy-saving features. Modular homes often appreciate in value in the same way that traditional site-built homes do.

Types of Manufactured Homes

There are various manufactured housing types, each with distinct characteristics and features. These are among the most prevalent types of manufactured homes:

• Single-Wide

A single-wide manufactured home has a single long piece instead of many sections connected together. These dwellings can be very small or very large and come in various widths, lengths, and room arrangements. Single-wide homes are typically 8-12 feet wide and can be towed as a single unit to their location. They can range in size from 400 to 1330 square feet.

• Double-Wide

A double-wide manufactured home is a multi-section home consisting of two sections that connect to form a single massive structure. Two-section homes are also referred to as double-wides. Typically, their square footage ranges from 1,000 to 2,300 square feet or even more. First-time homebuyers, empty nesters, and those searching for a second home favor double-wides.

Typically, double-wides are 20 to 36 feet wide and 32 to 90 feet long. The larger footprint necessitates more land, which could increase the total purchase price.

Because double-wides are not constructed on-site, numerous customization options are available. The sections are delivered separately and then assembled on-site.

• Triple-Wide

Triple-wide manufactured homes are constructed with three distinct sections that are connected. The three elements are delivered independently and assembled on-site. The two primary sections are double-wide, whereas the third section is roughly the size of a single-wide. The third section is commonly referred to as a tag-along.

Triple-wide manufactured homes are ideally suited for larger families or those who appreciate additional space. They typically range between 2,000 and 3,000 square feet and feature spacious living areas and abundant amenities. The maximum size of a triple-section mobile home is 3,600 square feet.

Manufactured Home Loan Options

While regular mortgages are possible, financing manufactured homes can be complex. Financing options include conventional, government-backed, FHA and VA, and private personal loans. Chattel loans, secured by movable personal goods, may be utilized for older models.

Each method of financing a manufactured home has its advantages and disadvantages. Among the most common ways to finance a manufactured home are:

• Conventional Loan

The MH Advantage and Choice Home programs of Fannie Mae and Freddie Mac are both designed to increase access to affordable manufactured home financing options. Nonetheless, there are significant distinctions between the two programs:

• • • Fannie Mae MH Advantage

Fannie Mae’s MH Advantage manufactured housing loan program offers flexible underwriting standards and reduced pricing for manufactured homes. The loan is intended for purchasers seeking a manufactured home with amenities and elevations similar to those found in site-built homes. The MH Advantage eligibility requirements include a 3% down payment, a minimum credit score of 620, and a maximum term of 30 years.

• • • Freddie Mac Choice Home Program

CHOICEHome® is a unique, low-cost mortgage program that provides conventional site-built financing for real-estate factory-built homes that meet the HUD Code and have the attributes of a site-built home. A 5% down payment is required, terms of up to 25 years are available, and loan limitations vary by area.

• FHA Loan

A Title I loan can be used to buy or refinance a manufactured home, a developed lot on which to build a manufactured home, or both a manufactured home and a lot. The home must be used as the borrower’s primary residence.

• VA Loan

VA loans are government-backed loans that benefit borrowers because they help the consumer obtain long-term financial benefits. They offer financing for manufactured homes. 

A borrower must possess an eligibility certificate to qualify for a VA loan for manufactured homes. They must occupy the property for which they are obtaining financing. To be eligible for VA financing, the residence must be attached to a permanent foundation, classified and taxed as real property, meet VA minimum property requirements, and comply with the application building code and zoning requirements for real estate.

• USDA Loan

The USDA Rural Development Single Family Housing Guaranteed Loan Program assists rural American homebuyers with financing. This includes manufactured homes, which can help increase the housing supply in rural America and make homeownership accessible to millions of individuals.

To qualify for USDA Rural Development financing, the unit must be new, (a) transported directly from the manufacturer to the site where it will be financed, (b) have a floor area of at least 400 square feet, (c) installed on a permanent foundation constructed per FHA guidelines, (d) meet the Federal Manufactured Home Construction and Safety Standard, and (e) be certified by its builder as meeting thermal requirements.

• Chattel Mortgage

A chattel mortgage is a loan used to buy or refinance a manufactured home not permanently anchored to the ground. The transportable item, or “chattel,” secures and serves as security for the loan. If the borrower defaults on the loan, the lender has an ownership interest in the property and can repossess it. Security agreements are another name for chattel mortgages.

Apply for a Tacoma Manufactured Home Loan

Many financial institutions do not offer manufactured home loans because of the perceived high-risk level. The encouraging thing is that we don’t! Capital Home Mortgage provides financing for manufactured homes, offering an option that transitions from building to permanent ownership with a single closing. 

Call (803) 600-0088 to speak with our Tacoma Home Loan Specialists about your manufactured home financing option.