Modular homes have become increasingly popular over the past few years as the cost and complexity of traditional home building has dramatically increased. If you’re thinking about buying a modular home, check out this helpful guide on everything you need to know about modular home loans, including what they are, the different options available, and why they may be the right choice for you.
What is a Modular Home Loan?
Before looking for modular home lenders, it’s important to know what modular home loans are. A modular home loan is a special mortgage loan that differs from one used for a traditional “stick-built” home.
If you’re thinking about obtaining a modular home loan, here are a few options to consider.
What Are the Different Types of Modular Home Loans?
There are several different options when it comes to financing a modular home. Depending on the type of loan you choose, your monthly payment will vary. The most common loan products offered by modular home lenders include:
- Conventional Loans (e.g., Fannie Mae, Freddie Mac): Conventional loans are sold to Fannie Mae or Freddie Mac and meet their specific guidelines. Typically, they are the most advantageous for customers with a strong credit profile or equity. However, a common misconception is that conventional loans require a 20% down payment. Although a higher down payment may lead to better loan terms, a conventional loan may still be the best option even with much smaller down payments.
- FHA Loans: Just like manufactured homes, FHA loans are a popular option that can be used to purchase modular homes. And unlike conventional loans, the Federal Housing Administration (FHA) backs FHA loans, which makes them more accessible to qualified borrowers.
- VA Loans: These specific types of loans are only available to veterans and qualified service members; the Department of Veteran Affairs backs them. Additionally, you will have to request a Certificate of Eligibility (COE) to show your lender that you qualify for this specific loan.
Do I Qualify for a Loan on a Modular Home?
Several factors come into play to qualify for a specific home loan product. But, don’t sweat it — our loan specialists here at Cascade Financial Services will walk you through each step of the modular home loan process with absolute precision, allowing you to get pre-approved and an inch closer to purchasing your very own modular home. We’ll explain everything in detail and never leave you in the dark.
Frequently Asked Questions on Modular Home Loans
We get it: There can be a lot to understand regarding modular home loans, especially if this is your first time applying. No need to worry, our lending specialists have the answers to some of the common questions asked about these products!