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Manufactured Homes

Reverse Mortgage and Manufactured Homes

Can You Do a Reverse Mortgage on a Manufactured Home? 

Yes, FHA has financing for manufactured homes (double wide) and factory-built housing.  Manufactured homes are often sold and transported in sections to be assembled on-site and are required to be on a foundation that was not moved.


Manufactured Housing and Standards

The term "manufactured home" was adopted in 1980 by the U.S. Congress to describe a type of house that is constructed in a factory to comply with a building code developed by the Department of Housing and Urban Development (HUD).  


Since mid-1976, all manufactured homes have been constructed to meet the federal building standards adopted and administered by HUD. This national code is called the National Manufactured Home Construction and Safety Standards. The code regulates manufactured home design and construction, strength and durability, fire-resistance, and energy-efficiency. It also prescribes the performance standards for the heating, plumbing, air conditioning, thermal, and electrical systems. 


According to FHA rules, a manufactured home differs from a new construction project because of the nature of its assembly. New construction property is built "on-site". FHA defines a manufactured home as "a structure that is transportable in one or more sections. In traveling mode, the home is eight feet or more in width and forty feet or more in length." 


Some buyers may wonder if the assembly counts as "construction", and would such "construction" reclassify the manufactured home in the eyes of the FHA? Here are the parameters: 


Guidelines for Borrowers with Manufactured Homes

To be eligible for FHA mortgage insurance, the manufactured home must be built after June 15, 1976, and there must be a certification label to prove it. 


*Manufactured home floor space cannot be smaller than 400 square feet and must be classified as real estate.


* The home’s floor area must be no less than 400 square feet (in 2010, the average size was 1,515 square feet).


* The structure must be built and remain on a permanent chassis, and it must be connected to the foundation through welds, bolts, and various light guage metal plates.


*The home must have a seal that shows it has been constructed in conformance with Federal Manufactured Home Construction and Safety Standards. If your home was constructed after 1990, it will have this seal.


* The finished grade elevation beneath the manufactured home or, if a basement is used, the lowest finished exterior grade adjacent to the perimeter enclosure, shall be at or above the 100-year return frequency flood elevation.


* The home must be classified and taxed as “real estate” and cannot have been installed or occupied previously at any other site or location.


Are Manufactured Homes Safe?

Manufactured homes are designed and built to comply with construction code that takes into consideration wind safety requirements and snow loads for the area in which the home will be located to make sure each home is strong and durable.

 

Following the construction of manufactured homes, there is an internal inspection process both during and after the construction of the home to certify that the HUD Code was followed properly. This inspection process is done to ensure that the home has been built to the correct standards for the zone it will be placed in.  Although there are many considerations builders keep in mind to ensure manufactured homes are safe, just like with site built homes and other buildings, extreme elements may still cause damage to your manufactured home. If you live in an environment known to have extreme weather, check with local experts on how you can prepare your home for extreme weather.


NOTE: All FHA loans must have an FHA home inspection completed before closing by a licensed FHA inspector that will verify that the home meets HUD standards. ... FHA is an option for manufactured home purchases and refinances with many lenders. 


Hud Requirements - These are guidelines and regulations. It is not necessary you read them all. If you are doing a refinance, however, your home must be in accordance with FHA guidelines.


This is an exhaustive guidebook from HUD which can be helpful in regard to manufactured homes and the regulations set forth by HUD. 


https://www.hud.gov/program_offices/administration/hudclips/guidebooks/4930.3G 


QUESTIONS AND ANSWERS

Will HUD issue certification labels (HUD tags) if my home was built before 1976?

No. The Department will not issue tags for a manufactured (mobile) home constructed prior to the enforcement of the Manufactured Home Construction and Safety Standards, effective June 15, 1976.

 

I have a deck/porch that's been added to an existing manufactured home and was told I need to get an AC letter. How do I get one?

The purpose of an Alternate Construction (AC) letter is to permit manufacturers to build innovative manufactured (mobile) homes with the new technology. Homes built under the AC program do not conform to the requirements of the Manufactured Home Construction and Safety Standards, 24 CFR Part 3280 (the Standards). Manufacturers must obtain permission from the Department prior to construction and shipment of homes built under the AC program.


Patios and decks are regulated by the construction codes for each state and/or local housing authority. If the property has an addition attached after the home was sited, the attachment is not regulated by HUD Standards or Regulations; therefore the property does not need an AC letter. If an addition has been added to a manufactured home, it may take the home out of conformance with the Standards.


What is the difference between manufactured and modular homes?

Manufactured homes are constructed according to a code administered by the U.S. Department of Housing and Urban Development (HUD Code). 


The HUD Code, unlike conventional building codes, requires manufactured homes to be constructed on a permanent chassis. Modular homes are constructed to the same state, local or regional building codes as site-built homes. Other types of systems-built homes include panelized wall systems, log homes, structural insulated panels, and insulating concrete forms.


What if the home does not have tie downs and HUD requires them for safety?

A manufactured home inspection is required on all manufacured home loans and  will determine if your home is safe for all occupants should there be strong winds or storms in your area. If the inspector determines your home needs tie downs, you will be required to do the repairs prior to closing.  The cost of the tie downs can be financed as part of your loan. Typically, inspectors have contractors they recommend who can complete the work, but you can choose your own. The contractor's fee can be paid on the HUD-1 settlement statement so it does not have to be out of pocket.  Here is an article on tie-down. https://www.nachi.org/manufactured-home-tie-downs.htm 

Modular - Manufactured Homes - Site Built

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Which Should I Buy?

So you want to buy a home, but you're comparing modular, manufactured, and site-built.  What's the difference? 

 

Site-Built -  Modular - Manufactured Homes

Site-built homes are constructed on land, "on site", the site that has been chosen for your home. They are built according to specifications at the site. Many of the homes in America are built in this way.  However, is this the best model for building a sturdy home? 


Both modular and manufactured homes are built in factories. The modular home is assembled in sections.  It is then transported to the home site by a flatbed truck. Once at the site, the sections are put together according to the schematics.  Modular homes can be customized homes because they have been built in sections. 


Manufactured homes are built in factories but are completely constructed before being transported to the home site. But manufactured homes are not as easily customized as modular homes or homes built on site. An advantage of manufactured homes is sthey can be delivered within days as opposed to modular homes.  Modular homes can be expensive and must also meet local building codes.   


More differences between manufactured and modular homes:

Manufactured homes are constructed according to a code administered by the U.S. Department of Housing and Urban Development (HUD Code).
 

The HUD Code, unlike conventional building codes, requires manufactured homes to be constructed on a permanent chassis. Modular homes are constructed to the same state, local or regional building codes as site-built homes.  Modular homes have certain distinct advantages over site-built homes. Modular home construction is often considered superior to site build construction methods as follows:
 

· Climate Controlled Manufacturing 

· Modular Design Flexibility

· Speed of Modular Construction

· Modular Homes’ Quality of Construction

· Energy Efficiency of Modular Homes

· Rigidity of Modular Homes


Conclusion:   Manufactured homes can be more difficult to refinance in the future. In addition to the usual appraisal on the home, a manufactured home inspection is required. Both of these types of homes, modular and manufactured, can be lower in cost than homes built on site.   


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