• Manufactured Homes and Financing Them

    • Almost once a month I get the opportunity to help a client finance a manufactured home as Real Property. Manufactured Homes (MFH) can often be built brand new at a price per square foot that can’t be matched by on site construction. Stick built construction we refer to as a Single Family Residence (SFR). To this day, MFH’s have a certain, I believe unfair stigma of not being a very good investment. However, I would say that this is largely based upon the older Early 80’s and older MFH’s that looked more like a box rather than having a similar look and characteristics of the homes we see built today and back in the early 90’s. Like traditional SFR homes, MFH’s do depreciate and experience the same Price Filtering as compared to similar homes that are newly built. However, as the cost of building and placing a home and property grows, it also pulls up the value of both types of properties. MFH’s always seem to provide a lower cost of housing per sqft as compared to a Stick Built Home, often at a cost that is 20% lower. MFH’s that were built Pre-HUD (before June 1, 1976) are very difficult to finance and Prime Lending is not available. However, those MFH’s built to HUD specifications (Post-HUD) can be financed with Prime Lending options; Conventional, FHA, VA and now in Oregon, USDA. It’s important to note that by my count, only about half of the Banks and Mortgage Lenders will finance these homes with their Prime Lending Products and the options and terms can vary greatly between lenders. Here is a break down of the minimum down payments required by each loan type:
      • Conventional 5% Down
      • FHA 3.5% Down
      • VA 0% Down
      • USDA (built 2006 & newer) 0% Down

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