With the housing market “hot” now in Grayson County and surrounding areas, some homebuyers are considering manufactured homes as a way to home ownership. If you are looking into the mobile home market, there are some differences to be aware of in financing, simply due to the unique nature of these homes.
“Make sure your manufactured home qualifies for a loan; the home has to be on the original site for FHA and conventional loans,” Michelle Castle, of Guild Mortgage in Sherman, said. “If it’s not, then you can go VA. They are all fixed-rate financing in these situations.”
The idea is for the mobile home to be “converted to Real Estate” from its beginning label as “personal property,” according to Castle. Her firm — and others making manufactured home loans — has to verify this status with the state of Texas: The Texas Department of Housing and Community Affairs.
“Basically, the wheels have to be removed; and the tongues and axles have to be taken off,” Castle said. “The underpinning has to be done; it has to be tied down and the foundation has to be secure. If not, it’s personal property and we can’t loan against that.”
Once that process is done, the owner must convert the title to real estate through a title company. This must be presented to the loan company at mortgage application.
“Once all this is done, we can do the loan,” Castle said. “The process is much the same as a traditional home. You do have to have a credit score of 620 at least, but it’s a great way to get a lot of home for a low amount of money.”
Local manufactured home dealers agreed; and that the industry is moving onto more solid footing.
“We are meeting more and more building criteria to match with site built homes,” Eric Benge, sales manager at Clayton Homes in Denison, said. “We are using site building material and construction techniques now; so, it is different than before. We are taking the ‘trailer house’ aspect out of it altogether.”
These new concepts are being done in part to streamline the process for manufactured homebuyers with lending institutions. Benge said that some lending institutions are accepting 30 year terms now.
“We are meeting their criteria; and it gives them less of a risk,” Benge said. “We are able to do all sorts of loans: VA, FHA and conventional. It shows that our investment will last.”
In addition, installation practices, insulation material and ‘low-E windows’ show that the manufactured home industry is updating specifications and material.
Benge added that construction techniques such as increasing the roof pitch from five feet to 12 feet gives a more “natural” and “residential” look to manufactured homes. It’s all part of the update happening in the industry, Benge noted.
“This all helps the financing process for people; it can be almost like traditional houses,” Benge said. “It depends on the bank, but more and more are approaching them (mobile homes) like traditional ones.”
Chad Long experienced the mobile home financing process firsthand and he agreed it is different and has one piece of advice: Be prepared to do things differently.
“You have to get approvals you don’t realize; and of course, you have to have land for it,” Long said. “You have to do your homework, but it can turn out great like our’s did. I’ve heard the process is even better now. It’s a little less complicated.”
Long, with wife, Cathey, financed a manufactured home on a 15 year term; and was amazed at the extra items needed for purchase.
“We had to have a certain credit score,” Long, who lived in Grayson County at the time, said. “And the process was more like buying a car than buying a house.”
According to Long, other requirements included utility set-up, legal specifications for the lot, delivery and installation processes; and a concrete block for the air conditioning unit.
“The house was well built; and a good solution for our situation at the time,” Long said. “Even though it was more of a hassle in some ways, it was worth the extra time and work. We enjoyed it.”
According to Castle, one advantage of manufactured home ownership is that the land is already there to build a traditional house if that is in one’s plans.
“We like the land it is on; you already have a ready-made site,” Castle said. “We love doing manufactured home loans; we are the only ones who do them around here. It can be a great way to homeownership.”
Benge, who has been in the manufactured home industry for 10 years, also noted a new trend with “modular homes,” which are sectioned pre-fabricated modules fit together to make a house.
“It’s just a different way of doing things,” he said. “They can be configured to match city codes; so some cities are allowing them in the city limits.”
According to Benge, some lenders are starting to take modular homes on as loans. He’s done three in Denison and two in Sherman in recent months.
“Banks are taking them on now; as long as there is land tied to them,” he explained. “It makes such a difference to be able to build in the city. It makes it more appealing to them (banks).”
Benge explained that modular homes are “craned in” or assembled by remote controlled robots like a puzzle.
“Manufactured homes are no longer just out in the country,” he said.