Whether you're already a resident of Sacramento or looking to relocate here, a manufactured home can be an affordable option for homeownership. Today's manufactured homes are designed with stylish exteriors and modern fixtures and appliances, making them nearly indiscernible from traditional site-built homes. A manufactured home option means you could have a beautiful home at a fraction of the price. And there are a variety of financing options available for manufactured homes, including a chattel loan.
A manufactured home is a pre-fabricated home, which means the house is built off-site, usually in a factory-type setting, and then relocated to where you want to reside. Manufactured homes, sometimes called mobile homes, are available in a single-wide, double-wide, and multi-wide options to suit your needs. Even though most people distinguish mobile homes as those built before June 15, 1976, manufactured homes are more recent constructions.
Most manufactured homes are 40 feet or longer and at least eight feet wide when transporting. A single-wide manufactured home is 18 feet or less wide and 90 feet or less long, while a double-wide is 20 feet wide and no more than 90 feet long. Manufactured homes are transported to your desired location, which can be land you own or rent or a lot in a mobile home park. Once placed on the ground, the manufactured home receives its finishing touches, including connection to electricity and sewer lines.
Manufactured homes offer affordable monthly payments and lower taxes, and they can make the reality of homeownership easier for many.
Chattel loans cover vehicles, machinery, and other moveable personal property. The moveable property, referred to as the chattel, becomes collateral for the loan. What that means is, if you were to default on the chattel loan, the lender could repossess your manufactured home to sell it and repay the loan.
Chattel loans often finance manufactured homes built after June 15, 1976. At that point, the Department of Housing and Urban Development sets forth new safety and construction standards for all mobile or manufactured homes. Chattel loans offer a quick closing and are more streamlined than traditional ones. You can often go from application to financing in hand in about 30 days with a chattel loan. If you decide to move the home, the chattel loan will follow it to the new location.
Chattel loans require a 5% to 10% down payment, which is less than the standard mortgage requirement of 20%. The down payment is slightly higher than other financing options, such as a VA or FHA loan. Chattel loans offer lower closing costs, are typically for smaller amounts, and have shorter terms than traditional loans. As stated, chattel loans process faster than standard options, getting you into your home more quickly.
The process of a chattel loan is also applicant-driven, making it as fast or as slow as you want. You're in control of gathering documents to push the process forward, instead of the bank or lender needing to keep the process moving. Typically, even with higher interest rates attached to a chattel loan, you can pay it off faster than a traditional mortgage because the loan amount is smaller. The loan term is usually between 15 and 25 years, depending on how much you're financing and paying monthly.
Every loan option has its advantages and disadvantages; you need to weigh each to determine the best financing solution for you and your needs. Chattel loans have higher interest rates than other options because the bank only has an interest stake in the manufactured home. Banks face higher risks with chattel loans, so interest rates vary. All loans base your interest rate on your loan type, credit score, income, and debt-to-income ratio. With a chattel loan, you run the risk of losing your home to repossession if you default on the loan.
Once you've decided on a manufactured home and wish to finance your purchase with a chattel loan, the next step is to qualify for financing. The steps to homeownership include:
If you haven't settled on a manufactured home yet, it's best to work with a real estate agent or sales representative. They can connect you with a manufactured home that meets your needs in Sacramento, California.
When you're ready to make homeownership a reality in Sacramento, California, reach out to the knowledgeable team at Cascade Financial Services. We specialize in loans for manufactured homes, including chattel, VA loans, and FHA loans. We can help you look at your options and decide which financing option best suits your needs. If you have any questions, give us a call at 877-869-7082. You can even begin the prequalification process online today to get on the path to homeownership.