Financing a Manufactured Home – What You Need To Know

Mobile home prices in Colorado have skyrocketed in recent past.  Most sellers are only looking for cash when selling their properties.  Unless your manufactured home is in the most ideal park, it may be very hard to find a cash buyer if you’re looking to earn top dollar for your manufactured home.

Since we’re in the business of brokering manufactured homes, we come across mobile home buyers that need always financing.  Almost everyone asks us about what are terms are.  Truth be told, we do not offer financing for our clients homes, unless specifically directed by them.  Whichever the broker is, chances are, you won’t find any financing, unless you go through a commercial lender for manufactured homes.

Let’s Clear The Air About Mobile Home Financing

As a buyer, you have to realize that this is an extended process compared to traditional mortgages on “stick built” homes or even real estate (if you’re looking for a mobile home in a community).  First things first, manufactured homes in communities are considered “personal property.”  Not many banks like to lend on this this asset class.  At this point, you may be asking, “well, why is that?”

Personal property, in the case of mobile or manufactured homes have a stigma of depreciating.  Most banks find this to be  a  less secure investment, than homes built on land with a foundation.  The good news is there are still a handful of companies that will work with these type of homes.  In fact, we’ve helped several buyers get financing on their manufactured home purchases, within communities.

What’s The Process Like?

Well, first things first.  If you need financing, then the best thing to do is make sure you’re approved.  If you’re shopping for a mobile home, you’ll want to give yourself a head start from the competition.  All you have to do is find a financing company and submit an application.

To Save yourself more time, consider the following:

-Most companies have a pre-requisite of 650 credit score.  

-Most companies will not give mortgages on homes that are older than a year built of 2000, unless the home is a double-wide.

-Get approved by the community as soon as possible. You’ll have to send proof of approval.

The financial institution that you’re working with will be running a credit check on you.  They’re also going to need to verify employment and need verification on several different items.  There will be some back and forth taking place which should last around 3-4 weeks, depending on the speed of the applicant and manufactured loan specialist.

How Much Money Do I Need?

I’d say you need about $7,000 to get financing.  This number may seem high, but there’s three things that you must consider when buying a manufactured home.  1) Most parks require first months lot rent and a security deposit. That’s about $1,300, based on Denver lot rents. 2) Your manufactured home dealer will require an earnest money deposit.  We charge anywhere from $500-$1,000. This will vary on the home price.  3) The manufactured home loan company will require anywhere from $3,500-$5,000 depending on your credit score, term of loan length, home price and your income.

How Long Is The Manufactured Loan Process?

Besides the back and forth between the buyer, broker and mortgage company, the manufactured home will have to be appraised by a 3rd party appraiser.

All in all, I’d say, expect the process to take about 6-7 weeks for the transaction to be finalized.  So, if you’re in need of a home fast, this is why you’ll want to submit a loan application as soon as possible.  This is a process that will require patience and access to a printer and scanner if you do not have one.