When considering the purchase of a new home, many Florida homebuyers are not aware of the options offered by mobile homes. “Mobile Home” is an umbrella term that may include modular homes and manufactured homes, which are both classified as prefabricated homes. If you're looking for an affordable home option in Tallahassee, you may want to consider a mobile home. Certain “mobile homes” may also be eligible for FHA Mortgage loans, similar to site-built homes.
What Is a Mobile Home?
The FHA defines a manufactured home as a prefabricated home that can be transported in one or more sections. It must be 40 feet or longer and at least 8 feet wide while in traveling mode. Mobile homes are put together in a factory-style setting and then moved to a final construction destination. Modular homes are affixed to a permanent foundation. Once the home has been placed in its location, additional construction services, such as plumbing and electricity, are often required.
What Are the Types of FHA Loans?
FHA loans may be used to purchase home and land, refinance to combine home and land together (often to obtain a much lower interest rate), refinance your home to get cash out for major projects, or refinance to consolidate debt.
What Are the Regulations for an FHA Loan on a Mobile Home?
A few regulations are in place to determine an FHA-eligible manufactured home. The Department of Housing and Urban Development (HUD) sets these regulations. The home must comply with the federal manufactured construction and safety standards and be labeled this way. For a home to qualify, it must have been built after June 15, 1976, and have a certification label to prove the construction date. The manufactured home cannot be any smaller than 400 square feet of floor space.
Finally, a taxable real estate classification must be on the home, meaning it has been deemed a living space. This excludes prefabricated sheds, shipping containers, and similar structures from qualifying for FHA assistance.
What Is FHA Mortgage Insurance?
FHA mortgage insurance serves a dual purpose, helping both lenders and homebuyers. FHA insurance will protect the lender in the event of mortgage default by paying the claim. This system also allows homebuyers to provide peace of mind to lenders and approve more mortgages with decreased risk. Manufactured home loans are not considered federal government loans because the FHA is not the entity loaning money itself. This means that interest rates are negotiated between the FHA-approved lender and Tallahassee borrower only, and the set rate is fixed for the remainder of the loan term.
How Do You Qualify for an FHA Loan?
Homes must be considered a single-family residence and classified as one unit to qualify for an FHA loan. FHA classifications and loans do not apply to barndominiums, log cabins, stilt homes, or any home exclusively powered by wind or solar.
Required Qualifications on the Home
To qualify for an FHA manufactured home insurance policy, homes must be manufactured new and covered by at least a one-year manufacturer's warranty. It must also meet all building and installation standards set for that particular model. The location where the home will be installed must meet any local standards for a livable site and consider sustainable practices. The home must have an adequate water supply, access to a sewage disposal facility, and have all-weather road access.
All local and state building guidelines must be followed when installing the home on a permanent site. In addition, the residence's exterior must visibly display the HUD-approved seal and have any towage hardware, running gear, and wheels removed from the structure.
Required Qualifications on the Borrower
Borrowers who are interested in an FHA loan must also follow specific criteria to receive any assistance. The borrower must have the funds needed to meet the minimum down payment for the home and provide proof of sufficient income to cover loan payments and living expenses simultaneously.
The manufactured home must be the borrower's primary residence, meaning it cannot be used as a vacation home or seasonal living. The home must also be occupied by the borrower and cannot be used as a rental property. Borrowers must have a plot of land to place the house on that meets all previous homesite criteria mentioned.
Manufactured homes are a fantastic opportunity for anyone looking to become a homeowner. By using the guidelines set forth by the FHA, lending companies are more incentivized to approve because of these trusted standards. With FHA insurance also available on these loans, both lenders and borrowers can have a sense of security in their investment.
If you're considering a manufactured home as your next address in Tallahassee, FHA loans may be a viable solution to easy financing and help you purchase a place to call your own. Contact one of the home financing experts at Cascade Financial Services today to answer any questions about FHA loans for manufactured homes. With many loan options to help you purchase a modular or manufactured home, the team at Cascade will work with you to develop the best strategy to get your home project financed today. You can reach a team member at 877-869-7082, or via our convenient and secure messaging service, or apply for prequalification online.