If you are in the market for a RTM (ready-to-move) manufactured home, but don’t have the cash on hand to pay for it up front, there are a variety of lenders within our network that will provide you the Manufactured Home Mortgage Loan required to help you complete the purchase. Our lender require that that you already own the land outright in which the RTM will be placed on, or you carry a very small mortgage balance on the land.
Many banks and other traditional lending sources throw up a lot of roadblocks when it comes to financing a manufactured home; quite a few banks won’t even finance this type of purchase. The old reasoning is that a manufactured home is almost certain to depreciate in value over time, as opposed to a site-built single-family dwelling, which can appreciate over time on the basis of property values. However that is not the case with the manufactured homes that are built within controlled environments away from the environmental hazards.
Site-built single-family homes can generally see their values go up as the neighborhood becomes more desirable. Even in the most positive real estate markets, though, manufactured homes are more typically evaluated on the basis of age and condition, as opposed to location. The locations where manufactured homes can be installed, thanks to zoning restrictions, are generally not in places where the land itself will shoot up in value as quickly as urban centres. As a result, you often have to find alternative financing solutions to get the money you need. Fortunately, Amansad Financial has connections with a number of lenders who fund manufactured home purchases.
Manufactured Home Lenders
Here are some things to know about mortgages for manufactured homes:
1. You can generally get mortgages for RTM homes whether you want to live in it yourself or rent it out to tenants. Alternative lenders are more interested in the equity involved than your credit score or any other metric. The amount of equity available in the manufactured home will generally drive the decision. For example, if you’re buying a $150,000 manufactured home and have $20,000 to put down, and also own land value at $100,000 in which the RTM will be secured. Once a new appraisal is completed the value of the RTM and land would likely come in at over $300,000. In simple theory you would begin your Manufactured Home Mortgage Loan with $150,000 in equity and increase it with each monthly payment. The manufactured home lender is concerned with what would happen if you went into default and the house had to be sold. In that instance, the appraisal would indicate whether having over $150,000 in equity; therefore a very secure investment for a private lender.
2. Alternative lenders have more flexible amortization options than traditional lenders. In some cases you can get an interest only manufactured mortgage home loan while you either save up the rest of the balance to pay the loan off at the term, or you can amortize the home for up to 30 and even 35 years. Obviously, you’re paying a lot more over time because of the added interest expense, but if you can take advantage of prepayment privileges that some lenders offer, you will end up ahead of the game.
3. If you’re looking at putting your manufactured home up in a rural community, be aware that most alternative lenders require an LTV ratio of 55% to 65% depending on location, although in some cases it can go as high as 70%.
4. What if you already own the land and just want to buy the home itself? Amansad Financial has some connections to lenders who will simply provide a cash take out on the land to be used to purchase the RTM. Again, equity is the driving force in such a decision.
There are some advantages to building an RTM manufactured homes rather than having a site-built home built on your land.
1. RTM manufactured homes come with a controlled environment, keeping the costs of construction down.
2. RTM manufactured homes generally come with one service contact, so no matter what your question is, you only need to call one service representative instead of dealing with an electrician, a painter, a plumber and so on.
3. RTM manufactured homes take much less time to build, between four and six months, as opposed to the minimum of nine months for a site-built home.
4. RTM manufactured homes are made within a controlled environment. That means that costs are predictable and quality control is consistent. There are generally far fewer surprises with RTM construction than there are with site-built construction.
Financing for Manufactured Homes
Amansad Financial has built relationships with a number of lenders who finance RTM home purchases. Give one of our alternative financing specialists a call, and we can connect you with the best lender for your situation.
Note: (Amansad Financial does not provide financing on stand-alone Ready to move manufactured homes without security from existing land.)