Why Is A Mortgage For A Manufactured Home Sometimes Different Than For A Traditional Home?

A mortgage is a specific loan for real estate. Some types of manufactured housing are not considered to be actual real estate and that may make them ineligible for a traditional mortgage. It is important when considering financing a manufactured home that you understand that some may not qualify but very often there are things that can be done to the manufactured home that will allow it to qualify for a mortgage.

Buying mobile homes with mortgage loans.
Buying mobile homes with mortgage loans.

This means that you need to have a correct understanding and then you need to be able to make whatever adjustments to your home that is required to qualify for the mortgage. There are some situations, however, that simply will not allow the home to qualify and in those cases then other types of loans could be available.

With most traditional mortgage lenders it will be necessary for the home to be at least 400 square feet. This means when you are searching for a home you will want to make sure that it is at least this size so that you can qualify for a mortgage. In most cases, you will want to be looking for a home that is at least 400 square feet because smaller than that is unusually small.

Mobile home financing

Another important factor is that you place it on an approved foundation. If the home is put on a foundation that is not approved then you will not be able to get a traditional mortgage for it. By doing so it can be taxed as real estate and that will help it be eligible for conventional mortgages as well as for mortgages that are backed by the government. It is unfortunate that some people rush to get their home and they either get in a home that doesn’t qualify for a mortgage or they put it on a foundation that is not approved and either of those situations will prevent them from getting a regular mortgage.

Another clear indication that the home is a vehicle rather than a house is if you have to pay any type of fees to DMV. If the home is on wheels then it is not considered a house. This means it will be necessary to have the wheels removed and if there’s any type of license on it then that will also need to be removed. It will need to be put on an approved foundation.

If for any reason it isn’t possible to meet the qualifications for a traditional mortgage then it is still possible to get loans for a manufactured home such as a personal property loan rather than a traditional loan for real estate. This type of loan will require a minimum of 5% down and the home itself will have to be fairly new. A mortgage, however, will typically offer better terms and lower interest as well as allowing you to finance it for a longer period of time.

It is important to know that quite a few home loan plans for manufactured housing come with very strict guidelines. These guidelines will have certain requirements on the age of the home as well as its condition and the condition of the property. The reason is that this type of housing usually depreciates whereas other types of housing often appreciate in value. Getting a loan for this type of house is absolutely possible. If you can, then you should certainly get a home that will qualify for a traditional mortgage.