A manufacturer home loan that is classified as personal property, wherein the home is financed alone without the land being encumbered into the loan or the home being attached to real property. Manufactured homes cited in lans-lease communities are an example of “home only” financing. This type of financing is sometimes referred to as a “chattel” loan.
Land / Home
This is financing where the manufactured home is placed on land using an approved foundation system. The home is considered an affixture to the property and is financed as real estate and is subject to all conditions, regulations and taxation as real property.
Land – in – Lieu
This is financing for a manufactured home to be located on private property in which the land is used as collateral for the loan. Lenders will allow purchaser to use all or a portion of the land equity instead (in-lieu) thereby reducing the cash down payment requirement.
This is a temporary loan that is used to to make funds available to the manufactured home retailer and/or contractors on a scheduled basis as these various elements of the construction are completed. At the completion of the building/construction process this loan is paid off from the proceeds of the permanent loan.
FHA insures the originating lender against loss if the borrower defaults. There are numerous requirements and restrictions on FHA insured loans, including the approval of the home, retailer, and installation. The loan terms on an approved FHA loan is typically 20 years for a single section home and 25 years on a multi-section home. Down payment requirements and interest rates are much lower than conventional manufactured housing financing.
The minimum home standards to qualify for for an FHA-insured mortgage are:
- Must have a floor area of at least 400 square feet
- Must be classified and subject to taxation as real estate
- Must be built after the implementation of the HUD Code (June 15, 1976)
- Must be built on and remailn on a permanent chasis
- Property placement must be above the 100-year return frequency flood elevation