If you're looking to move to Phoenix or have decided it's time to become a homeowner in Arizona, you may want to consider purchasing a manufactured home. Manufactured homes are affordable options as a starter or retirement home but can also be enjoyed by any homeowner in the Phoenix area. You can finance a manufactured home via various financing options, one of which is an FHA loan.
A manufactured home is a prefabricated house, built off-site in a factory-type setting and then transported to its final destination. Prefabricated homes include mobile homes, manufactured homes, and modular homes. All three of these options are built off-site with subtle differences. A mobile home is typically viewed as a prefabricated home manufactured prior to June 15, 1976. The Department of Housing and Urban Development placed stricter guidelines on the construction and safety of prefabricated homes on this date. Prefabricated homes after this date are usually called manufactured homes to differentiate from mobile homes.
Modular homes are prefabricated homes affixed to a permanent foundation, allowing homeowners to finance these homes through a conventional mortgage. Today's prefabricated homes are designed with modern fixtures and appliances as well as a stylish exterior, making them almost indistinguishable from conventional site-built homes. If you haven't looked at a manufactured home recently, it's time to check one out as a viable option for your new home purchase.
While the Federal Housing Association doesn't issue loans for manufactured homes, it provides government backing to loans, insuring those loans through approved private lenders. This government backing means that the FHA insures the loan against nonpayment, making these loans more appealing to private lenders. The FHA designed these loans to help moderate-income people become homeowners by offering a financing option with a lower down payment. An FHA loan typically requires a 3.5% down payment compared to a traditional mortgage that requires a 20% down payment. A lower down payment means you need less money to get into a home.
Another benefit to potential borrowers on an FHA loan is that you don't usually need to have as high of a credit score as you would for a conventional mortgage. You can take out a 30-year loan on a manufactured home through an FHA loan.
The FHA has strict guidelines for manufactured homes to qualify for an FHA loan. The home must be labeled to indicate that it meets the federal safety and construction standards regulated by the Department of Housing and Urban Development. It must include a minimum of 400 square feet of livable space and be classified as real estate. The manufactured home must be your primary residence and a single-family residence to qualify for an FHA loan. FHA loans are not available for log cabin homes, shipping container homes, barn-dominions, stilt homes, exclusively solar-powered, or solely wind-powered homes of any type.
Guidelines established by the FHA loans for manufactured homes include:
FHA loans typically cover the wall-to-wall carpeting, built-in appliances, and other built-in equipment on the manufactured home.
The FHA also has specific requirements for borrowers to meet to qualify for an FHA loan on a manufactured home. These requirements include:
Once you've decided that you want to apply for an FHA loan on your manufactured home in Phoenix, Arizona, there are several steps you need to take to get started. These steps include: