BATTLECALL GUEST EXPERT: Steve Gillman, Real Estate Investor

Manufactured home financing can be more difficult than traditional financing. One way to get that mobile home or manufactured home financed is using a Title 1 loan. Below is the latest information from HUD.

Financing Manufactured (Mobile) Homes

Under the Title I program, approved lenders make loans from their own funds to eligible borrowers to finance the purchase of a manufactured home and/or lot, and FHA insures the lender against loss if the borrower defaults. Credit is granted based upon the applicant's credit history and ability to repay the loan in regular monthly installments.

Title I manufactured home loans are not Government loans or grants, and are not low interest rate loans. The interest rate is fixed and is generally based upon the prevailing market rate in the area at the time the loan is made. FHA does not lend money.

Purpose of the Loan

A Title I loan may be used for the purchase or refinancing of a manufactured home, a developed lot on which to place a manufactured home, or a manufactured home and lot in combination. The home must be used as the principal residence of the borrowers.

Maximum Loan Amount

manufactured home only - $48,600

manufactured home lot - $16,200

manufactured home & lot - $64,800

The dollar limits for lot loans and combination loans may be increased up to 85 percent in designated high-cost areas. For further information on high-cost area limits, contact the local HUD field office.

Maximum Loan Term

20 years for a loan on a manufactured home or on a single-section manufactured home and lot.

15 years for a manufactured home lot loan.

25 years for a loan on a multi-section manufactured home and lot.

Manufactured homes are usually purchased through dealers or retailers that sell the homes. The names of lenders in your area which specialize in financing manufactured homes can be obtained from local retailers. These retailers are listed in the yellow pages of your telephone directory. They have the required application forms. FHA neither loans money nor gives grants to purchase homes. Also, manufactured homes must comply with the National Manufactured Home Construction and Safety Standards. The approved FHA lender can explain the mortgage credit and income eligibility requirements to qualify for a loan.

Consumer Protection

HUD provides two types of consumer protection. The borrower must sign a HUD Placement Certificate agreeing that the home has been installed and set-up to their satisfaction by the retailer before the lender can give the loan proceeds to the retailer. After moving in, the borrower can call HUD at (800) 927-2891 to get assistance about the problems with construction of the home.

Eligible Borrowers Must:

Have sufficient funds on hand to make the minimum required downpayment of 5 percent.

Be able to demonstrate that they have adequate income to make the payments on the loan and meet their other expenses.

Intend to use the manufactured home as their principal residence.

Have a suitable site on which to place the manufactured home. The home may be placed on a rental site in manufactured home park, or on an individual homesite owned or leased by the borrowers.

An Eligible Manufactured Home Must:

Meet the National Manufactured Home Construction and Safety Standards.

Carry a one-year manufacturer's warranty if it is a new manufactured home.

Be installed on a homesite that meets established local standards for site suitability and has adequate water supply and sewage disposal facilities available.

The proceeds of a Title I manufactured home loan may not be used to finance furniture (for example, beds, chairs, sofas, lamps, rugs, etc.). However, built-in appliances and equipment and wall-to-wall carpeting are eligible for financing.

Equal Opportunity in Housing

The Fair Housing Act prohibits discrimination in housing and related transactions--including mortgages and home improvement loans. Lenders may not deny funds or offer less favorable terms and conditions in lending on the basis of the borrower's race, color, religion, sex, national origin, familial status (i.e., the presence or number of children in a household) or disability. In addition, lending decisions may not be based on the race, color, sex, religion, national origin, familial status or disabilities of persons associated with the borrower or with the area surrounding the property. If you believe you have been the victim of discrimination in mortgage lending on one of the prohibited bases, you may file a fair housing complaint by contacting a local fair housing advocacy group, the Office of Human Rights for your state or local government, or by calling the national Fair Housing Hotline at (800) 669-9777 or TTY: (800) 927-9275.