ModularHomes.com puts you in touch with qualified lenders that offer a range of manufactured home loans. This includes financing for top qualifying applicants with excellent credit, as well as a wide range of other loan programs for prospective buyers who can afford a home today, but have had some credit challenges in the past. The following information will give you a better idea of the manufactured home financing options so that you can find the best financing for you and your family.
Manufactured homes are typically financed in one of two ways. The first is through a chattel loan where the prefab home is considered personal property. The second is through conventional financing that encumbers property. Once you find the manufactured home style that meets your needs, such as a ranch home or double wide home, it’s time to decide what kind of financing is best in your situation.
Chattel loans are personal property loans made for the purchase or refinance of a manufactured home that is not permanently affixed to the real estate. These manufactured home loans are usually used for homes in manufactured home communities. Down payment requirements for this type of loan can be as low as 5%. Terms for chattel loans are usually capped at 20 years. As far as interest rates, chattel loan rates are typically 3-4% higher than the traditional mortgage loan.
The Federal Notional Mortgage Association (FNMA or Fannie Mae) was established in 1938 as a publicly traded government sponsored enterprise (GSE). The purpose of the GSE’s is to purchase loans from lenders and pool the loans into mortgage backed securities (MBS). This allows lenders to sell their loans and free up capital to make more mortgage loans. Lenders underwrite their conventional loans to Fannie Mae’s guidelines, and will either sell them to an investor that will service the loan for Fannie or service the loan themselves. Conventional loans have down payment requirements that can be as low as 5%. They have programs for all property types, and that of course includes manufactured homes and other types of prefab homes. Conventional loans are sometimes the most attractive option for individuals who have larger down payments. This is because unlike FHA loans, conventional loans do not require monthly mortgage insurance if the borrow puts more than 20% down on their manufactured home.
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