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FHA Manufactured Home Loans California

When considering housing options in California, manufactured homes are a popular choice, and it's easy to see why. Today's manufactured home is almost indistinguishable from conventional site-built homes with plenty of options and typically a smaller price tag. If you're looking to purchase a home soon, it's time to start researching your funding options, especially for a manufactured home. Manufactured homes have a few different requirements from a traditional site-built home when it comes to financing. One of your options is a Federal Housing Administration manufactured home loan.

What Is an FHA Loan?

The Federal Housing Administration is a part of the Department of Housing and Urban Development in the United States. FHA provides government-backing to mortgages financed through an FHA lender via an FHA loan. These types of loans are designed to assist homebuyers in the low-to-moderate income bracket. An FHA loan will generally require a lower down payment than a traditional mortgage and offers more flexibility in qualifying based on credit scores.

Where a traditional mortgage typically requires a 20% down payment, an FHA loan may be as low as 3.5% on the down payment. You may also be eligible for an FHA loan if your credit score is too low to qualify for traditional financing.

How Do You Qualify for an FHA Loan?

Qualification requirements vary, depending on the type of FHA loan you're applying for, but standard criteria include:

  • Income. You must have a current source of income and be able to prove it.
  • Credit. Your FHA lender will perform a credit check and review your credit history.
  • Debts. Credit card balances, auto loans, and any other obligations you have will be reviewed.
  • Equity. The FHA lender will consider any equity in the property.
  • Loan amount. The total amount requested for financing the property will be considered.

In order to qualify for an FHA loan, the home must be your primary residence. FHA lenders have restrictions on the total amount you can borrow, typically based on real estate costs in the area where you plan to purchase a home.

What Types of Manufactured Homes Qualify for an FHA Loan?

When looking at manufactured homes, it's important to know the difference between them. Financing options vary depending on the type of manufactured home you pick. Manufactured homes are available as single-wide, double-wide, and multi-wide options. Modular homes are another option for prefabricated living. Mobile homes manufactured before June 15, 1976, will not qualify for an FHA loan as the guidelines have changed. Homes manufactured prior to that date do not adhere to the current guidelines, thus making them ineligible for FHA financing.

What Is a Manufactured Home?

Manufactured homes are built away from the placement site. These are prefabricated homes that are transported to their location in one or more sections. A manufactured home must be a minimum of forty feet in length and at least eight feet wide when in traveling mode. They differ from new construction because of the methods used to assemble them, according to the FHA. New construction or site-built homes are built 100% on the site they're located, from the ground up. A prefabricated home is built almost entirely off-site in a factory-style setting.

They partially assemble manufactured homes off-site before being transported to its final destination. Once placed on the site, there may be some additional construction that takes place after the pre-assembled parts arrive. This final construction can be completed by building contractors, individual laborers, or even construction companies. You also need to have a plumber and electrician out to connect the home to the local power source and sewer.

Single-wide manufactured homes are 18 feet or less in width and 90 feet or less in length, with a double-wide at 20 feet minimum width and 90 feet as a maximum length. Single-wide manufactured homes are the perfect size for a couple just starting out, someone who lives alone, or a retiree who doesn't need a lot of space anymore. Manufactured homes are affordable and come in very manageable sizes. If a manufactured home was constructed after June 14, 1976, then it will meet the higher safety and construction codes set forth by HUD, and will qualify for FHA financing.

Manufactured homes today offer a modern exterior, appliances, and fixtures, along with a stylish interior. Many times, it's hard to discern between new construction and manufactured homes.

A manufactured home can also be financed by a chattel loan, which covers personal property that can be moved. This type of property includes vehicles, machinery, or manufactured homes. The property is the collateral on the loan, just like a traditional mortgage. If you own the land that the manufactured home is placed on and default on the chattel loan, the bank can only go after the house. 

What Is a Modular Home?

Another prefabricated home option in California is a modular home. This type of home differs from a manufactured home because it's set on a permanent foundation. A modular home is still built off-site in a factory-type setting and moved to a permanent location. Because a modular home is permanently rooted, you might be able to finance one with a traditional mortgage, including the FHA option.

If you haven't purchased the land yet, you can also include the land in the loan with the modular home at the time of the purchase. The advantage to owning the land your modular home is on is that you don't have to pay lot rent long past after the home loan is paid off.

If you're looking to purchase a prefabricated home in California, contact Cascade Financial Services to learn more about your options. We proudly serve the Sacramento area. A knowledgeable team member would be happy to answer any questions you may have or work to get you pre-qualified so you can start searching for your new home. You can give us a call at 877-869-7082, or reach out via our convenient contact us page. Cascade Financial is here to help your California manufactured home dreams come true.