What good agency can offer a mortgage for a modular home?
Modular Home Questions October 22nd, 2009I am selling my house and my buyer has a modular home for sale herself. Her buyer is having a problem securing a mortgage I believe because the home is a modular home. I am trying to help her so it will help my house to sell. I appreciate any information. Thanks Chuck
October 22nd, 2009 at 3:31 pm
Confusion over the use of the terms "modular", "manufactured", "double-wide", and "mobile" are common. If by "modular" you mean that she has a double-wide or mobile home, then you are using the term incorrectly. Modular (also called "systems-built") homes are stick-built homes built in sections in a factory instead of built on-site. They are built to conform to all state, local or regional building codes at their destinations and are subject to local inspection to make sure the structure meets code, the same as a site-built home. They are constructed in modules, trucked to the homesite and set on a foundation or crawl-space by crane. Modular homes appraise about the same as site-built and a well-constructed modular should have the same longevity as its site-built counterpart. They can be single- or two-story and a well-built modular has 2×6 16" center on walls.
In contrast, a "double-wide" (formerly referred to as a mobile home or trailer) is built to conform to a federal building code (HUD) rather than the building codes at their destinations; they are sometimes referred to as "HUD Code" homes. They are essentially a house trailer – built on a non-removable steel chassis and transported on their own wheels. They may be constructed in modules which are joined upon arrival at the home site. When arriving at the site, the wheels are removed but the frame left in place. Usually they are set on a slab. If they are not set on a permanent foundation, they MAY BE DIFFICULT TO RE-FINANCE. Building inspectors are not required to approve the structure although they may check on the work done locally, such as electrical hook-up. These homes sometimes decrease in value over time. One clue that the home is a double-wide is to look at the roof pitch. It will not be as steep as a true modular home. This is because the roof on modular houses is hinged for transport, then raised after the house is set so pitches up to 12"12" are possible. Mobiles or double-wides do not have their roofs hinged; however, in order to get under overpasses, etc. as they go down the road, the roof pitches are of necessity, much less steep – either flat or 4"12" or maybe 6"
Your buyers should have no problem getting a mortgage on a TRUE MODULAR home since there is really no difference between it and a site-built home except for the fact that it was constructed in a factory instead of at the home site. If they truly do have a modular home and are having difficulty, then the lenders may not be familiar with the true modular product. Some lenders may have never dealt with this product. Looking for a different lender would be the answer. However, I suspect that she is having difficulty because what she has is a double-wide HUD-code home to sell and they may tend to depreciate rather than appreciate in value.
First, she needs to determine exactly what kind of construction it is – stick-built modular or mobile. If it’s on a permanent steel frame, it’s mobile. If it has a basement or crawl space, go down there and look up at the construction of the floor. If it’s modular construction, it should look exactly like the construction of your own site-built house (except it may have even more wood in it so it would be stronger and survive the trip from the factory!).
The seller may be asking too much money for the mobile home and may have to lower the price just to get rid of it.
October 22nd, 2009 at 3:31 pm
It will be hard. Unlike a house modular homes like cars depreciate as they get older. People with the money for mortgages do not like to invest on things that depreciate.
October 22nd, 2009 at 3:31 pm
Are you talking about a MOBILE home? Modulars are easy to finance. Mobiles require special lenders at times depending on the circumstances. Best advise to you is stay out of this because you could end up giving bad advise. Have their agent put them in touch with the appropriate lender.