If you’re considering buying a manufactured home, know that you’ll be in great company among the tens of millions of Americans—to be exact, 22 million people live in manufactured homes today. These savvy home buyers know that manufactured homes are actually among the best ways to get a great-quality home at a price you can afford. Nine percent of all new single-family home starts in the U.S. are manufactured homes, making them an indispensable part of America’s homeownership economy.
This guide will take you through every step in the process of buying a manufactured home in 2022–from how to find a mobile home you love, to investigating your financing options, to the closing process. It’s certainly a big decision, but it also doesn’t have to be a difficult process, so long as you come prepared.
As you’re considering what you want from your manufactured home, it also pays to begin thinking about how you’ll finance your purchase.
Manufactured Home Financing
Many financing options for manufactured homes are available. Often, they’re different from the options that are available for site-built homes, so the process for getting financing may be unfamiliar to some buyers—but millions of buyers every year can and do finance their manufactured homes.
If you intend to purchase a manufactured home or a modular home that is already placed on a permanent foundation, or one that you plan to place on a permanent foundation, you may be eligible for a traditional mortgage similar to the mortgage on a site-built home. Construction-to-permanent (CtoP) loans are a popular multi-stage loan product that finances every stage of the process of buying a new manufactured home with land situated on a permanent foundation. Many buyers can also get help from the U.S. government with financing their mobile home. Check these options to see which your mobile home may be eligible for.
For buyers who are buying a mobile home without land, you’ll want to look into chattel loans, the most common type of loan for home-only buyers. With a chattel loan, your manufactured home will be titled as personal property, like a vehicle, rather than as real estate. Chattel loans sometimes come with higher rates and more stringent terms than other types of mobile home financing, but they can still be a solid option for buyers who need to buy a mobile home without land.
Just like with any home, your credit and financial history will affect the type of manufactured home financing for which you’re eligible. However, it’s still possible to get manufactured home financing even if your credit isn’t perfect.
Examining a Manufactured Home
When you find a manufactured home, you’re interested in, you first want to get a good look at the manufactured home in person. It’s important to know that a manufactured home is structurally sound before you make an offer, so do your due diligence just as you would with a site-built home. In particular, you should make sure to note the information from two sources:
The HUD tag, a metal plate typically located on the outside of the house.
The data plate, a piece of paper that’s typically attached to the wall in a closet or cabinet.
HUD tags and data plates include all kinds of key information, including a home’s ratings for extreme weather and temperature. They also certify that a manufactured home meets all relevant HUD standards.
You should also make sure to ask for the home’s inspection records. If the home hasn’t been inspected, insist on an independent inspection through a professional independent mobile home inspector such as Datacomp. An inspector will be able to spot things that you might miss, such as hidden water damage and/or structural deficiencies. Think carefully about buying any manufactured home that needs a lot of repairs, and make sure to get a seller’s disclosure statement before putting any money down.
Finally, be sure to check the title history of the manufactured home to ensure that it has no liens or unpaid taxes against it. If the seller cannot produce a title, ask them to obtain a duplicate title before you make an offer. If they are not the owner of record on the title, they’ll need to have it signed over to them by the owner of record before the sale happens.
Making an Offer on a Manufactured Home
When you’re ready to make an offer on a manufactured home, it’s easy to do it.
First, it’s critical to retain the services of a real estate attorney and/or real estate agent at this point in the process. A real estate professional will be able to guide you through the process of making an offer and creating legally binding documents for the process.
It’s also important to represent yourself as a serious and qualified buyer. Sellers usually require a deposit of “earnest money” before accepting an offer, which you’ll usually forfeit if you don’t go through with the sale. Remember to make sure that the seller knows what kind of financing you’ve been pre-qualified for.
Think carefully about what kind of contingencies you want to include in your offer. Some contingencies are important to protect yourself, such as a contingency for a complete inspection, but too many contingencies can make your offer seem unreliable. Ask your real estate professional which contingencies are essential to include.
Closing on a Manufactured Home
The closing process for a manufactured home, in which the buyer receives the keys and the seller receives payment, is generally similar to that of any other home. The closing process can commence as soon as the buyer’s application for financing is approved, and any other contingencies of the offer are satisfied. Today’s closings often don’t even have to happen in person. Paperwork and escrow funds can often be exchanged through electronic means.
Typically, closing involves the following elements:
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