Mobile Home Parks For Sale Investment Video Video Clips. Duration : 4.02 Mins.
Have you have ever tried to finance a mobile home manufactured before 1976? You probably felt like it would be easier to sell snow cones in Antarctica! Fortunately owner financing and private mortgages offer creative alternatives for hard to finance mobile homes.
When purchasing a new mobile home financing is often offered through the dealer or retailers. Approved Federal Housing Administration (FHA) lenders are an option for mobile homes that meet the guidelines, including the age restriction of built on or after June 1976.
Manufactured homes permanently attached to a foundation also have access to financing as a mobile and land package, provided credit and equity are acceptable.
But the question still remains, "Where can older manufactured homes, single wide mobiles, and buyers with less than perfect credit look for financing?"
Private Investors
A private investor, independent bank, or credit union may provide alternative financing options. These are generally local investors or in-house portfolio lenders that are familiar with the area and comfortable with the risk at a lower investment exposure in exchange for a higher rate of return.
Owner Financing
Asking the seller to carry back a note is a common way to finance the purchase of a mobile home. The owner acts as the bank by accepting payments from the buyer over time. This avoids meeting the more restrictive bank mortgage requirements.
While interest rates are likely higher with owner financing it can provide a viable solution allowing the buyer to take advantage of the affordable housing mobile homes offer.
Some sellers prefer a lump sum of cash today and are reluctant to collect payments over time with owner financing. If a seller prefers cash now they can consider temporary seller financing and then sell all or part of the payments for cash to a note investor on the secondary market.
Manufactured homes make up an average of 8% of all home sales according to the US Census Bureau. There are some states, like North and South Carolina, where that percentage nears 18%. Many of the states with mobile home sales over 10% are also the same states that rank higher for overall owner financing.
This just proves what most note buyers and note brokers have known for years. When there are properties or buyers that are hard to finance people turn to owner financing.
If you are looking to buy a mobile home and you have a limited amount of money to put down towards your purchase, you may want to consider a FHA mobile home loan. FHA stands for Federal Housing Administration and it's responsible for Housing and Urban Development (also known as HUD). How does this help you? FHA insures your mortgage loan so that lenders will give you a good deal, even though you do not have a sizable down payment.
Under the FHA mobile home loan umbrella there are two types of programs. One is for people who already own land to put the mobile home on and the other is for people that choose to locate their mobile home in an established mobile home park.
When lenders consider applicants for FHA-backed mobile home loans, they must follow certain eligibility requirements. These requirements include considering the applicant's credit rating, the income and the ability to repay the debt.
A Title 1 loan can be used to buy a mobile home, a lot on which to place a mobile home, or both. The home must be the primary residence of the person or persons obtaining the loan. There are maximum loan amounts as well as loan terms that must be adhered to, as follows. For a mobile home only, the maximum is ,600. For a piece of land or lot, the maximum is ,200, while the maximum for a combination of the two is ,800. Maximum loan terms for FHA mobile home loans are: 20 years for a mobile home or a single section mobile home and lot, 15 years for a lot, and 25 years for a multi-section mobile home and lot.
Most of the time when you buy a mobile home, you will also have the opportunity to finance your purchase at the mobile home dealer in which you make your purchase. Sometimes these dealers will not offer FHA-backed loans. If they do not, ask them for a referral to a lender who will use FHA. Or you could consider finding a lender online.
To qualify for a FHA-backed mobile or manufactured home mortgage loan, you must meet some minimum criteria. You must be able to provider five percent down payment (although there are additional programs to help if you do not have this amount), proof of income and a suitable place to locate your mobile home (this may be on your own land or in a mobile home park).
FHA Mobile Home Mortgage Loans - How Do They Work?
