How to Finance a Mobile Home in Nevada
Posted: Dec 21, 2019
A large part of the appeal for mobile homes in Las Vegas is their affordability. The term mobile home can be misleading to some. They aren’t, by any means, RVs or private domiciles that run on wheels. We’re talking about prefabricated homes with factory-manufactured components that are later assembled to form your private residential space.
Financing your manufactured home isn’t complicated as much as it is different. The process can be quite tricky, but that doesn’t mean it can’t be done. Some might even find financing a manufactured home to be much easier and convenient compared to a traditionally built house.
How to Get a Loan for a Mobile Home in Nevada?
Let’s give you a quick overview of some of the loan programs for manufactured homes in Las Vegas.
From a bank or a credit union
Typically, getting a Nevada personal loan from a bank or a credit union is a lot easier if you own the land in which your manufactured home is situated. The basic requirements, in this case, would be:
- A credit score around 650
- A down-payment amount that varies from 10-20% of the price of the domicile.
- An income that is three times the mortgage amount
Only a small percent of manufactured homeowners own the land in which their mobile homes are located (20%).
So, if you don’t own the land and don’t plan on purchasing it any time soon, your next best option would be to get a loan from a bank or credit union, but with the assistance of a government program.
How to Get a Loan for a Mobile Home If You Don’t Own Any Land?
The following government-backed programs are great alternatives for those of you wondering how to finance land and manufactured home.
A USDA loan doesn’t require a down payment. You are also allowed a loan amount equivalent to the manufactured home’s appraisal value.
What Are the Major Requirements?
A USDA loan requires you to have a minimum credit score of 640. Also, the house should be situated in a rural location, which usually isn’t a problem since 97% of the land in Nevada is eligible for a USDA loan.
The manufactured homes should be less than a year old. They should also cover at least 400 square feet of ground or more. Along with that, it must be attached to a permanent foundation that needs to be certified by the respective officials. You would also be required to finance both the land and the manufactured home as part of the mortgage deal.
The only downside to this is that your income shouldn’t be above 115% of the median income of the county you’re staying in. It also charges a 2% fee to the total loan amount as well as a.5% to the monthly payment.
How to Finance a Mobile Home When Your Income Exceeds the USDA Limit?
Let’s say you don’t qualify for a USDA loan. In this case, you could try an FHA loan that doesn’t impose any income limits. These are long term loans that can last up to 20 years. Technically, the FHA doesn’t lend you the money. Instead, it insures the loan amount so that other lenders are more willing to finance your mortgage.
You would only need a credit score anywhere between 580 and 669, depending on your lender.
There are three types of FHA backed loans:
- A maximum mortgage amount of $94,904 if you’re purchasing both the home and the land.
- A maximum amount of $69,687 if you only plan on buying the home.
- A maximum amount of $23,226 if you already own the manufactured home and are merely seeking to purchase the lot.
A great feature of FHA financing is that all loan amounts can be assumed by the buyer in case you decide to sell it if the interest rates go up.
The major downside with an FHA loan, similar to a USDA loan, is the additional 1.5% that will be added to the loan amount along with a monthly fee of.85%. In addition to this, it also requires a minimum down payment of 3.5%.
Fannie Mae offers you a manufactured home advantage mortgage if you plan on owning the mobile home and the land. The down payment can go as low as 3%. However, you would need to fulfill a few requirements.
The home needs to be qualified for the MH advantage program by having a lot of the same traits as a site-built home. It would also need to be at least 12 feet wide and should cover at least 600 square feet of the ground and be attached to a permanent foundation.
Much similar to Fannie Mae, Freddie Mac is yet another government-aided program that offers loans for manufactured homes. However, it would require you to own the land in which the home is placed, and the down-payment will be at least 5%.
Additionally, any homes built before June 1976 won’t be qualified for the loan.
Let’s say you don’t own the land and don’t qualify for an FHA loan. You could always go for a chattel loan. In this case, your manufactured home would be used as collateral by the bank, and you will retain ownership once the loan amount is fully paid.
However, chattel loans typically have higher interest rates and fewer borrower protections, which is a deterrent to some.
VA (Veteran Affairs) loan
A VA loan requires the manufactured home to be attached to a permanent foundation. It comes with several other requirements and restrictions, as well.
If it is a single-wide home, then the maximum term of the loan is 20 years and 23 days. This is extended to 23 years and 32 days if the manufactured home is double-wide.
If you plan on financing both the house and the land, then the loan term is 25 years and 32 days.
However, this term can get shortened to 15 years and 32 days if you happen to already own the manufactured home, provided that you’re only financing the land.
A conventional loan usually involves a long and drawn-out process. If you’d rather not go for any of the above home mortgage loans, you could try taking out a personal loan. You would be taking out a significant loan amount for yourself and using it to finance your manufactured home.
Why Buy a Manufactured Home?
The average cost of a manufactured home is somewhere around $75000 ($40,000 if it’s a single wide). An average site-built home, on the other hand, costs up to four times that.
Not only are they way more affordable, but they can also be financed in a variety of ways as discussed.
Rahul is a renowned author and social media enthusiast.