Manufactured Homes
This section briefly describes those characteristics that define a manufactured home and also explains the special conditions required by lenders when qualifying for the best interest rates. For more comprehensive information see Buying a Manufactured Home.
01. What is a Manufactured Home?
A manufactured home is a pre-fabricated, single-family residential unit, constructed on a chassis and wheels and designed for permanent or semi-attachment to land. These homes are typically constructed in a factory, then transported to a lot where they are permanently affixed to the land.
Usually, a manufactured home is a structure that has all of the following characteristics:
- It is built on a permanent chassis.
- It is designed to be used as a dwelling with or without a permanent foundation.
- It is built in compliance with the National Manufactured Housing Construction and Safety Standards put into operation by the Department of Housing and Urban Development (HUD).
Compliance with these standards must be evidenced by a "certification label" that is permanently affixed to each transportable section of the manufactured home. In the past, manufactured homes were commonly known as mobile homes or trailers, and were used primarily as second, movable residences.
Because of the increased demand for affordable housing and the relative low cost to build, manufactured homes have become a major portion of the residential housing supply. Today most manufactured homes are attached to a permanent foundation, and are considered real property. Once manufactured homes are moved from the factory to a permanent location, very few are ever moved again.
Most manufactured homes are built in eight, ten or twelve-foot widths, and up to 60 feet in length. Two units attached side by side form what is commonly called a doublewide. The size and weight of manufactured homes makes them difficult and expensive to move once they are put in place. After being secured to a foundation, the manufactured home can be as practical and useful as conventional site-built homes, but often for a much lower cost.
Check Local Regulations
Please be aware that the rules and regulations regarding manufactured homes can vary by state, county and city. Check with your local officials about proper procedures and applicable laws.
02. Manufactured Homes as Real Property
In most states, a manufactured home is considered real property when the following requirements are met:
- A building permit is acquired.
- The manufactured home is attached to a permanent foundation.
- A recorded document is filed stating that the home has been placed on an acceptable permanent foundation.
- A certificate of occupancy is obtained.
After meeting these requirements, the manufactured home is:
- Registered with the county recorder as real property.
- Taxable as real property.
- No longer required to be registered with a motor vehicle department.
03. Loans for Manufactured and Mobile Homes
Once attached to a permanent foundation, conventional loans for most manufactured and mobile homes are available from the same sources as for traditional residences. Loans may also be available through government programs such as the Federal Housing Administration (FHA) and the Department of Veterans Affairs (VA).
Some common conditions required by many lenders:
- Manufactured home was built to codes established by the Department of Housing and Urban Development (HUD). This is evidenced by HUD Label numbers indicating date of manufacture no earlier than June 15, 1976.
- Home is permanently affixed to the ground with an approved foundation system.
- Foundation must be suitable to the local soil conditions and is acceptable and approved in the subject property's marketplace.
- The transportation system (wheels, axles and hitches) has been removed and the property has assumed the characteristics of site-built housing.
- The gross living area is greater than 924 square feet.
- Unimproved value of subject property equals 35 percent or less of the total value.
- Comparable home values are less than two miles from subject property.
- A site plan should be included in the appraisal.
- Subject property is easily accessible from public roads.
- Manufactured housing should be common for the area with no market resistance.