While there are still some lenders out there offering conventional (Fannie/Freddie) financing for manufactured homes, very few lenders are offering FHA/VA loans on them. For brokers and correspondent lenders this has created a big problem for them. Of the few lenders offering these products, their rates/fees are not very competitive and the restrictions added can make even the cleanest deal fall apart at the last minute. So the questions becomes, who is offering FHA/VA loans on manufactured homes these days? The answer...big banks, and they are keeping them for themselves.
PNC Mortgage, Wells Fargo and Bank of America still offer FHA/VA financing for manufactured homes but only in-house. No broker or correspondent offerings at all. So there is very little competition for these products and for real estate agents, this is VERY important to know. If they have a manufactured home listed for sale, they better have a reliable "source" for financing, same goes if they have a buyer looking for homes priced for many first time home buyers.
As a mortgage banker for PNC Mortgage, I have worked hard to get the word out to as many agents as I can (especially those with manufactured homes for sale) that I am one of the few lenders offering FHA and VA products for manufactured homes. Not only that, but specialize in them as well!
So my advice to real estate agents is if you don't have a source for manufactured homes at one of the "big 3" banks (or even if you do) ... call me. Keep my information on hand because you never know when you might need my services... :)
Saturday, July 31, 2010
Tuesday, July 13, 2010
Pounding Nails
Most people are surprised to learn that when putting a porch or steps to their manufactured home, that they must keep them free standing. Well, I shouldn't say they "must" keep them free standing, but they should and here is why.
Once something like a nail is driven into the manufactured home to attach the stairs or porch to the home, it could have affected the structural integrity of the home. You see, the home is structurally engineered to handle so much weight against the frame. Adding something like a porch, changes how much weight and pressure gets put against the frame. Once this happens, we need to have someone verify that the additonal weight did not affect the structural integrity of the home.
Many people are surprised to learn who handles this in the State of Washington. It's Labor and Industries. Once a permit is issued, L&I will come out to inspect and (hopefully) approve the addition to the home. The same inspection would be required with things like an add-on addition, a wood stove, new windows, anything that changes the original frame of the home.
That's why most people make their stairs free standing. Less permits, inspections and less hassles. I have also learned that each state designates who does the inspections. It's always a mystery the first time we have to find out who does it in a new state.
Once something like a nail is driven into the manufactured home to attach the stairs or porch to the home, it could have affected the structural integrity of the home. You see, the home is structurally engineered to handle so much weight against the frame. Adding something like a porch, changes how much weight and pressure gets put against the frame. Once this happens, we need to have someone verify that the additonal weight did not affect the structural integrity of the home.
Many people are surprised to learn who handles this in the State of Washington. It's Labor and Industries. Once a permit is issued, L&I will come out to inspect and (hopefully) approve the addition to the home. The same inspection would be required with things like an add-on addition, a wood stove, new windows, anything that changes the original frame of the home.
That's why most people make their stairs free standing. Less permits, inspections and less hassles. I have also learned that each state designates who does the inspections. It's always a mystery the first time we have to find out who does it in a new state.
Tuesday, July 6, 2010
Manufactured home vs. Modular home
Many people that call me for a mortgage on a manufactured home, mistakenly refer to their home as a "modular home". I've come to assume this is because they feel that by calling their home a "modular", they feel it gives it more of a quality that the name "manufactured home" doesn't.
The problem is that these are two, very distinct types of housing that can and does effect which type of mortgage it qualifies for. You see, a modular home qualifies for the same financing as a stick built home. Whereas a manufactured home may have different rates, costs and may not even qualify for a lot of loan programs. So, what is the difference between the two.
The two homes are essentially the same. In fact, from a distance or even up close, you would not tell the difference (except by the tag on the outside of the home). The difference is where the home was assembled. A manufactured home is assembled in a controlled environment and shipped in two pieces (for a double wide) and connected on it's foundation on the property. A modular home has all of the pieces shipped to the home site where it is assembled in the same fashion as a stick built home.
So, there you have it. While to some people modular may mean "quality". It is essentially the exact same house as a manufactured home, just assembled at the building site and not at the factory. I hope that clears the difference.
The problem is that these are two, very distinct types of housing that can and does effect which type of mortgage it qualifies for. You see, a modular home qualifies for the same financing as a stick built home. Whereas a manufactured home may have different rates, costs and may not even qualify for a lot of loan programs. So, what is the difference between the two.
The two homes are essentially the same. In fact, from a distance or even up close, you would not tell the difference (except by the tag on the outside of the home). The difference is where the home was assembled. A manufactured home is assembled in a controlled environment and shipped in two pieces (for a double wide) and connected on it's foundation on the property. A modular home has all of the pieces shipped to the home site where it is assembled in the same fashion as a stick built home.
So, there you have it. While to some people modular may mean "quality". It is essentially the exact same house as a manufactured home, just assembled at the building site and not at the factory. I hope that clears the difference.
Thursday, June 3, 2010
The Magic Date
June 15, 1976. In the manufactured home world, that's the magic date. You see, any home manufactured prior to that date is not eligible to have the home insured by HUD (and therefore not eligible for financing with FHA, VA, Fannie Mae or Freddie Mac).
I've had many people with homes manufactured prior that have asked if there are exceptions. I've had people that have gutted the home down to the frame and rebuilt their home. I've had customers with engineer's certificates claiming the home meets current HUD standards. I've had people re-wire the home. But it all boils down to the date on the data plate. The manufactured date. It has to be on or after June 15th, 1976. But why? Why that date?
That's the date that all manufactured home builders had to build up to HUD standards. The biggest standard was copper wiring. Prior to 6/15/76 aluminum wiring could be used. Now, not many dealers used aluminum wiring, especially as they knew it would be phased out and eventually eliminated, but they could. And after 6/15/76 they could not. And that's the reason, the homes built after that day, were 100% compliant with HUD's (new at the time) standards.
P.S. Just a little FYI...the tags on the outside of the home (one on each part of the home) were put on in 1976 to show which homes are compliant with HUD and have stayed on the homes ever since.
I've had many people with homes manufactured prior that have asked if there are exceptions. I've had people that have gutted the home down to the frame and rebuilt their home. I've had customers with engineer's certificates claiming the home meets current HUD standards. I've had people re-wire the home. But it all boils down to the date on the data plate. The manufactured date. It has to be on or after June 15th, 1976. But why? Why that date?
That's the date that all manufactured home builders had to build up to HUD standards. The biggest standard was copper wiring. Prior to 6/15/76 aluminum wiring could be used. Now, not many dealers used aluminum wiring, especially as they knew it would be phased out and eventually eliminated, but they could. And after 6/15/76 they could not. And that's the reason, the homes built after that day, were 100% compliant with HUD's (new at the time) standards.
P.S. Just a little FYI...the tags on the outside of the home (one on each part of the home) were put on in 1976 to show which homes are compliant with HUD and have stayed on the homes ever since.
Tuesday, May 18, 2010
Don't move that home!
I cannot tell you how many people find out from me that their "great idea" was really a huge mistake. I am talking about moving a manufactured home. People find a nice piece of land and put a used manufactured home on it and think they made a great decision when in fact, it was not.
You see, once a manufactured home has been moved (other than the first time when it is set up on the property) it is no longer eligible for Fannie Mae, Freddie Mac or FHA financing. Those 3 make up the majority of manufactured home lending. Only VA (and not all lenders) will accept a home that has been moved (with the exception of some lenders like Wash Fed that keep their loans in their own portfolio).
What is wrong with moving a manufactured home and why are the lenders not lending on them? To answer the first question, if done properly, there is nothing wrong with moving a manufactured home. It will not affect the structural integrity of the home. You can move a stick built home and it is still eligible for financing. The real questions is, why will lenders not lend on them. The answer is, they were all sold (except the VA who did not go along with it) on the fact that moving them not only affects the structural integrity but will lower the value of the home. Fannie, Freddie and FHA bought it and now, no longer will they accept a home that has been moved.
But who would sell them on this and why? It wouldn't be an engineering group, they know better. There is only one group it could be and when I was told who it was (by someone who was part of the lobby), it made perfect sense...manufactured home dealers. Think about it for a minute. If your choice was to move a used home on to your lot but in doing so, reduces your buyers to only people paying cash it essentially makes your home unsaleable. So do you move on a used, unsaleable home or do you just put a new home on your lot that you can sell with financing down the road. You are going to put the new home on the lot and who benefits from that? The manufactured home dealer.
Now that hasn't stopped the market for used manufactured homes. They are often purchased and moved into a park where the financing is a Chattel loan and not conventional real estate mortgages. For those of you who have always wondered why you cannot finance a manufactured home that has been moved more than once, now you know and most importantly, now you know why.
You see, once a manufactured home has been moved (other than the first time when it is set up on the property) it is no longer eligible for Fannie Mae, Freddie Mac or FHA financing. Those 3 make up the majority of manufactured home lending. Only VA (and not all lenders) will accept a home that has been moved (with the exception of some lenders like Wash Fed that keep their loans in their own portfolio).
What is wrong with moving a manufactured home and why are the lenders not lending on them? To answer the first question, if done properly, there is nothing wrong with moving a manufactured home. It will not affect the structural integrity of the home. You can move a stick built home and it is still eligible for financing. The real questions is, why will lenders not lend on them. The answer is, they were all sold (except the VA who did not go along with it) on the fact that moving them not only affects the structural integrity but will lower the value of the home. Fannie, Freddie and FHA bought it and now, no longer will they accept a home that has been moved.
But who would sell them on this and why? It wouldn't be an engineering group, they know better. There is only one group it could be and when I was told who it was (by someone who was part of the lobby), it made perfect sense...manufactured home dealers. Think about it for a minute. If your choice was to move a used home on to your lot but in doing so, reduces your buyers to only people paying cash it essentially makes your home unsaleable. So do you move on a used, unsaleable home or do you just put a new home on your lot that you can sell with financing down the road. You are going to put the new home on the lot and who benefits from that? The manufactured home dealer.
Now that hasn't stopped the market for used manufactured homes. They are often purchased and moved into a park where the financing is a Chattel loan and not conventional real estate mortgages. For those of you who have always wondered why you cannot finance a manufactured home that has been moved more than once, now you know and most importantly, now you know why.
Friday, May 7, 2010
Why did so many lenders drop manufactured homes?
Once upon a time, a manufactured home loan was available from just about every mortgage company out there. VA, FHA, conventional loans, you name it. It wasn't that long ago that most companies didn't even add to the rate or price for the home...same rates as stick built.
But not long ago, something happened. First, lenders dropped things like, investment home purchases or refinances for manufactured homes. Then fees would pop up to make the loan a bit more costly. Some lenders added rate hits for a manufactured home.
And then it happened. One by one, lenders were dropping manufactured homes from their list of eligible loan products. It seemed like I went from having 20 sources for manufactured home loans one day and the next I had 2. And then none.
Now I can tell you that as someone who specializes in manufactured home lending, having no lenders offering loans for your clients is not the best position to be in. Fortunately, I have aligned with some of the best products and lowest rates I have ever had and I am back in business but that is a story for another day.
I get asked quite a bit...why are lenders dropping manufactured homes? Most manufactured homeowners feel discriminated against, and to a point, rightly so. They are no different from any other homeowner. They go to work each day, pay their taxes, raise their families, mow their grass and have the same pride of ownership as a stick built homeowner. Why do they have to pay higher fees, higher rates (and now shop until they are blue in the face finding a lender) ? Just because they made the choice to buy a manufactured home (which in a lot of cases is better built than some stick built)?
Do the lenders still think that today's manufactured home is like an old trailer, with hitch and wheels that these folks could just back their truck up and haul their "house" away?
Well, the simple answer is no. The lenders are not discriminating against the style of home, they don't think the house will be towed away and they recognize that a manufactured home owner is really no different than a stick built homeowner. The bottom line is money...or more specifically, profit. And loss.
The first thing you need to remember is that the investor buying the loan is a bank. Bankers see profit and loss. They like profit (as do their shareholders) and dislike loss. If a certain type of loan is seeing more loss than others, they will either change the criteria for the loan (higher credit scores, better equity, higher fees,rate etc) or if that still doesn't work, they drop the product. Why keep a loan product that loses money? For a lot of lenders, manufactured home loans were losing money. Why were they losing money when we already acknowledged that a manufactured home owner is no different than a stick built homeowner? The answer to that question is one of the biggest selling points of a manufactured home...cost.
Manufactured homes are a true "affordable housing" alternative. The lower cost of a manufactured home makes it so a low to moderate income family can afford home ownership. This lower cost of home and lower loan amounts also make it less profitable for the bank.
Now I don't know if the foreclosure rate for a manufactured home is higher or lower than a stick built, but even if it's the exact same, the cost to the lender for a foreclosure is no different for a manufactured home and a stick built. So if your profit is lower on the loan due to lower loan amount but your loss is the same, the bank sees that the loss ratio is higher on a manufactured home and they are going to take action. Some lenders are tying to add some costs to the loan to make up the difference but most lenders dropped them all together.
And that is why most lenders have dropped their manufactured home programs. It isn't any type of discrimination...right or wrong...it all comes down to profit.
But not long ago, something happened. First, lenders dropped things like, investment home purchases or refinances for manufactured homes. Then fees would pop up to make the loan a bit more costly. Some lenders added rate hits for a manufactured home.
And then it happened. One by one, lenders were dropping manufactured homes from their list of eligible loan products. It seemed like I went from having 20 sources for manufactured home loans one day and the next I had 2. And then none.
Now I can tell you that as someone who specializes in manufactured home lending, having no lenders offering loans for your clients is not the best position to be in. Fortunately, I have aligned with some of the best products and lowest rates I have ever had and I am back in business but that is a story for another day.
I get asked quite a bit...why are lenders dropping manufactured homes? Most manufactured homeowners feel discriminated against, and to a point, rightly so. They are no different from any other homeowner. They go to work each day, pay their taxes, raise their families, mow their grass and have the same pride of ownership as a stick built homeowner. Why do they have to pay higher fees, higher rates (and now shop until they are blue in the face finding a lender) ? Just because they made the choice to buy a manufactured home (which in a lot of cases is better built than some stick built)?
Do the lenders still think that today's manufactured home is like an old trailer, with hitch and wheels that these folks could just back their truck up and haul their "house" away?
Well, the simple answer is no. The lenders are not discriminating against the style of home, they don't think the house will be towed away and they recognize that a manufactured home owner is really no different than a stick built homeowner. The bottom line is money...or more specifically, profit. And loss.
The first thing you need to remember is that the investor buying the loan is a bank. Bankers see profit and loss. They like profit (as do their shareholders) and dislike loss. If a certain type of loan is seeing more loss than others, they will either change the criteria for the loan (higher credit scores, better equity, higher fees,rate etc) or if that still doesn't work, they drop the product. Why keep a loan product that loses money? For a lot of lenders, manufactured home loans were losing money. Why were they losing money when we already acknowledged that a manufactured home owner is no different than a stick built homeowner? The answer to that question is one of the biggest selling points of a manufactured home...cost.
Manufactured homes are a true "affordable housing" alternative. The lower cost of a manufactured home makes it so a low to moderate income family can afford home ownership. This lower cost of home and lower loan amounts also make it less profitable for the bank.
Now I don't know if the foreclosure rate for a manufactured home is higher or lower than a stick built, but even if it's the exact same, the cost to the lender for a foreclosure is no different for a manufactured home and a stick built. So if your profit is lower on the loan due to lower loan amount but your loss is the same, the bank sees that the loss ratio is higher on a manufactured home and they are going to take action. Some lenders are tying to add some costs to the loan to make up the difference but most lenders dropped them all together.
And that is why most lenders have dropped their manufactured home programs. It isn't any type of discrimination...right or wrong...it all comes down to profit.
Wednesday, April 28, 2010
What happens next?
With just 3 days left to have your purchase agreement accepted to be eligible for the $8000 and $6500 tax credits, the thought crossed my mind (as I am sure many others in this business), what happens next?
Without a tax credit, will home sales fall in the short term? Will home prices drop as a result? Of course we have no way of knowing for sure but here are my thoughts.
We have something to compare this to. Auto rebates. You see, to me this is very similar and for those who don't know this, I spent nearly 20 years in the auto finance department of car dealerships. So, when I try to envision what will happen next, I look back to a time when a car company came out with a promotion/rebate that generated huge response and try to remember "what happened next"...here is what I think will happen.
Short term sales will drop...quite a bit...but it will rebound fairly quickly and turn out not as bad as you might think. There are a lot of people that have begun the thought process of buying a new home...the wheels are turning if you will...and they will move forward. There is also one very big selling point that will get a lot of people motivated to move.
Moving is contagious.
It's true. Don't believe me? Suppose one of your friends gets some new furniture, a new car, buys a trailer or a boat...it can be anything. Doesn't the thought cross your mind that maybe you should do the same? I know the furniture in my house, the cars in my driveway and the trailer I own are all the result of having a friend buy one first. I recently moved to a new home and I can tell you it got the wheels turning on numerous friends to do the same. One of my friends put an offer in this week and others have said they are seriously considering moving as well.
$8000 or even $6500 is a lot of money and can certainly be a motivating factor but I think an even bigger motivating factor will take over...keeping up with the Jones's! This is the motivating factor that has been selling homes for years. We haven't seen this for quite a while since...well...no one has really been buying homes. My theory is that this tax credit will eventually do exactly what it was set up to do, kick start the market.
So when you are helping one of your friends move this next month or two, I bet the thought of moving to a new home will cross your mind too.
Without a tax credit, will home sales fall in the short term? Will home prices drop as a result? Of course we have no way of knowing for sure but here are my thoughts.
We have something to compare this to. Auto rebates. You see, to me this is very similar and for those who don't know this, I spent nearly 20 years in the auto finance department of car dealerships. So, when I try to envision what will happen next, I look back to a time when a car company came out with a promotion/rebate that generated huge response and try to remember "what happened next"...here is what I think will happen.
Short term sales will drop...quite a bit...but it will rebound fairly quickly and turn out not as bad as you might think. There are a lot of people that have begun the thought process of buying a new home...the wheels are turning if you will...and they will move forward. There is also one very big selling point that will get a lot of people motivated to move.
Moving is contagious.
It's true. Don't believe me? Suppose one of your friends gets some new furniture, a new car, buys a trailer or a boat...it can be anything. Doesn't the thought cross your mind that maybe you should do the same? I know the furniture in my house, the cars in my driveway and the trailer I own are all the result of having a friend buy one first. I recently moved to a new home and I can tell you it got the wheels turning on numerous friends to do the same. One of my friends put an offer in this week and others have said they are seriously considering moving as well.
$8000 or even $6500 is a lot of money and can certainly be a motivating factor but I think an even bigger motivating factor will take over...keeping up with the Jones's! This is the motivating factor that has been selling homes for years. We haven't seen this for quite a while since...well...no one has really been buying homes. My theory is that this tax credit will eventually do exactly what it was set up to do, kick start the market.
So when you are helping one of your friends move this next month or two, I bet the thought of moving to a new home will cross your mind too.
Monday, April 26, 2010
The rush is on
The final week to qualify for the $8000 first time homebuyer tax credit and $6500 credit is ending this week. That means there are a lot a agents working long hours over the next few days getting offers accepted.
As one of the few lenders offering manufactured home financing, the phone has been ringing off the hook with agents looking for financing for their clients.
One of the great things about specializing in manufactured home loans is that, unlike a lot of mortgage loan officers that only work with a few realtors, I tend to work with a lot of them. Some will use my team for a manufactured home loan and then go back to their regular mortgage people after that, and occassionally...someone likes our service enough that they start sending all of their business our way.
Rates today for manufactured homes are still at 5.25% for FHA and 5.375% for conventional. All with no origination fee, no points and no underwriting fee.
That's all I have time for today, busy week ahead!!
As one of the few lenders offering manufactured home financing, the phone has been ringing off the hook with agents looking for financing for their clients.
One of the great things about specializing in manufactured home loans is that, unlike a lot of mortgage loan officers that only work with a few realtors, I tend to work with a lot of them. Some will use my team for a manufactured home loan and then go back to their regular mortgage people after that, and occassionally...someone likes our service enough that they start sending all of their business our way.
Rates today for manufactured homes are still at 5.25% for FHA and 5.375% for conventional. All with no origination fee, no points and no underwriting fee.
That's all I have time for today, busy week ahead!!
Wednesday, April 21, 2010
Financing a manufactured home
Many home buyers assume a manufactured home loan is no different than a stick built home. These days nothing could be further from the truth. Not only are fewer and fewer lenders even offering manufactured home mortgages, the credit requirements are getting more difficult.
PNC Mortgage has the best combination rate/fees/credit requirments of any lender I have found recently. They have FHA and VA loans with...get this...no "penalty" (higher rate/fees) for a manufactured home. Not only do they not add to the rate/fees for a manufactured home, they don't add to the rate/fees for credit score. So long as your mid-score is over 620, you qualify for the same FHA/VA rate/fee as a stick built buyer with a score of 800!
In the coming weeks I will cover more of the benefits of PNC as well as more information about manufactured home purchases.
PNC Mortgage has the best combination rate/fees/credit requirments of any lender I have found recently. They have FHA and VA loans with...get this...no "penalty" (higher rate/fees) for a manufactured home. Not only do they not add to the rate/fees for a manufactured home, they don't add to the rate/fees for credit score. So long as your mid-score is over 620, you qualify for the same FHA/VA rate/fee as a stick built buyer with a score of 800!
In the coming weeks I will cover more of the benefits of PNC as well as more information about manufactured home purchases.
Monday, April 19, 2010
First post
Well it is my first blog post today. In the coming days/weeks and months I hope to be able to share the in's and out's of today's manufactured home lending (and purchasing).
I am a mortgage banker/broker and I specialize in manufactured home lending.
There are many topics that will be discussed from the current trend in rates, what is needed to buy a manufactured home and what options are there for moving a manufactured home.
If there is a topic you would like covered, please feel free to email them to me. My address is manufacturedhomemortgage@gmail.com
I am a mortgage banker/broker and I specialize in manufactured home lending.
There are many topics that will be discussed from the current trend in rates, what is needed to buy a manufactured home and what options are there for moving a manufactured home.
If there is a topic you would like covered, please feel free to email them to me. My address is manufacturedhomemortgage@gmail.com
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