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Reverse Mortgage Lending on Manufactured Homes

January 26th, 2012
     

NOTICE: All Reverse Mortgage is no longer accepting applications on manufactured homes

 

 

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If you’re the owner of a manufactured home and you’re wondering about your eligibility for a reverse mortgage, here’s the short answer: you may be eligible.

Now for the longer answer. As with any prospective borrower, you must be aged 62 or older, you must legally own the home, it must be your primary residence, and you must be eligible for participation in Federal Housing Administration programs. And if you have a manufactured home, yes, you can get a reverse mortgage—as long as it was built after June 15, 1976.

Why is this particular date so important? It’s when the Department of Housing and Urban Development (HUD) started regulating the construction of manufactured homes under established guidelines. (Homes from before this date will not qualify for FHA-insured loans)

In 2009, manufactured units in condominium projects became eligible  for FHA-insured reverse mortgages, as long as they (as with all other manufactured homes) meet HUD guidelines.

Reverse Mortgage Guidelines for Borrowers with Manufactured Homes

  • The home’s floor area must be no less than 400 square feet (in 2010, the average size was 1,515 square feet).
  • The structure must be built and remain on a permanent chassis, and it must be connected to the foundation through welds, bolts, and various light gage metal plates.
  • The home must have a seal that shows it has been constructed in conformance with Federal Manufactured Home Construction and Safety Standards. If your home was constructed after June 15, 1976, it will have this seal.
  • The finished grade elevation beneath the manufactured home or, if a basement is used, the lowest finished exterior grade adjacent to the perimeter enclosure, shall be at or above the 100-year return frequency flood elevation.
  • The home must be classified and taxed as “real estate” and cannot have been installed or occupied previously at any other site or location.

*Manufactured homes are often referred to as “mobile homes” however a true mobile home where you do not own the land and is not taxed as real-estate are not eligible for any FHA reverse mortgage loan.

What This Could Mean for You

Even if your manufactured home was built after 1976, it might be difficult to find a reverse mortgage lender. Some require a minimum appraised property value, and in other instances, origination fees may run a little higher than for other types of dwellings because of an extra foundation inspection required by an engineering company to make sure it complies with HUD’s acceptable foundation requirements.

Another issue could be the value of the land your home is located on. Manufactured homes on large acreage can be difficult to get approved, since the value of the land could account for more of the appraised property value than the house itself. These sorts of cases can be tricky for loan underwriters.

Characteristics of Manufactured Homes

In 2010, there were 50,000 new manufactured homes placed in the United States, according to U.S. Census data, with the majority located outside of manufactured home communities. The South by far leads all other regions in the number of manufactured homes, with 34,000.

The average sales price of a manufactured home (both single- and double-wide) in 2010 was $62,800, according to Census data, the lowest since 2007, when prices peaked at $65,400. The Western region led sales prices with an average of $79,100.

 

03/2012:  Update to Reverse Mortgage manufactured Home Requirements

HUD has very specific guidelines for Manufactured homes and there are very few lenders who will still do them, but they can be done.

 HUD/FHA requirements / guidelines:

  1. Minimum Square Footage of 400 Square Feet* (current lender requirements are greater)
  2. The Property must be constructed after June 15, 1976 and meet HUD guidelines as certified by HUD Label 24 CFR 3280.11.
  3. Must be classified and taxed as real estate (must have turned in DMV registrations in favor of real property).
  4. Was built on and remains on a permanent chassis.
  5. Was designed to be used with a dwelling with a permanent foundation built to FHA criteria.
  6. Finished grade elevation beneath the home or if a basement is used, the basement floor, must be at or above the 100-year frequency flood elevation (however, lenders will no longer accept a manufactured home in a flood hazard area).
  7. Must be situated on a permanent foundation
  8. Requires an engineer’s certification on the foundation
  9. borrowers must own the land

Additional Lender requirements / guidelines:

  1. The comparable sales for the appraisal must be available within 1 mile in urban and suburban areas and 20 miles in rural areas.
  2. The sales cannot require excessive adjustments or the property will not be acceptable.
  3. All Sections of the Home must have HUD tags accessible to the appraiser.
  4. The appraiser must indicate that the seal of the home has not been compromised and any structural modifications or additions pose no issues.
  5. All credit reports must be verified as having no personal liens pertaining to the dwelling.
  6. No single wide units.
  7. No units located in a manufactured condominium complex.
  8. Units must be on their original site.  Homes moved from other previously installed sites are ineligible.

 

All Reverse Mortgage® is one of the few lenders currently funding reverse mortgages on manufactured homes. To find out more about whether or not you can take out a reverse mortgage on your dwelling call us Toll Free (800) 565-1722 or request a formal quote

By Cliff Auerswald – Add me to your circles

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12 Responses to “Reverse Mortgage Lending on Manufactured Homes”

  1. Richard A. says:

    I am interested in a reverse mortgage for my manufactured home

  2. admin says:

    Hello Richard,

    I just emailed you directly. We are currently lending on manufactured homes in CA, CO, OR, WA, TX, FL, GA, NJ, PA. Looking forward to working with you! – Cliff

  3. David says:

    Am really interested in reverse mortgage as my wife recently passed and I need to do something soon. I own a manufactured home built in 1998 and is in a 55 and older community. I own the land. Thank you!

  4. Nancy says:

    My Uncle has tried numerous times to get a reverse mortgage. He has a manufactured home built in 1999. He lives in an area where all the homes are manufactured. He does not have a lot or block number, he has a ninety-nine year property lease. Does this disqualify him for a reverse mortgage? Any help you can offer is greatly appreciated.

  5. Mike Branson says:

    Hi Nancy,

    HUD does have a provision for manufactured homes if they meet all HUD’s guidelines and they will also allow leased land under certain restrictions. The problem here is that there are very few lenders still doing manufactured homes of any kind and even then, they have their own additional guidelines that must be met or they will not lend on the property. HUD establishes the minimum parameters that lenders must follow to be able to obtain the insurance on the loan and then lenders add any “overlays” onto those minimum standards to be certain they can sell the loans and that they are acting in a prudent manner. Lenders have identified additional risk in manufactured homes and therefore have really tightened down on this segment of the market.

    HUD requires that the lease has 99 years remaining on the lease at the time of the loan or extends 50 years beyond the youngest borrower’s 100th birthday. If the lease meets those requirements, then it meets the basic requirements. When you say the property does not have a lot or block, the property itself still has to have a method by which the property is delineated, whether it’s lot and block, meets and bounds or US Government Survey (also known as the section and township system), there is always a way to determine property lines to describe a parcel. So if there are sales of similar properties and your uncle’s property meets all of HUD’s guidelines, it would just be a matter of whether or not he met one of the few remaining lender’s guidelines who will do a reverse mortgage on manufactured homes. Not knowing who your uncle has applied through thus far, I don’t know if I can help or not but if you would like to call us, we can check further to see if there may be a possible source for his loan.

  6. Annette Yamamoto says:

    We just did a short sale of our home in Hawaii due to my husbands job loss. We purchased a manufactured home in cash. Our manufactured home built in 1996, It is on a one acre lot in Indiana. We owe IRS taxes and are wondering if we could get an equit loan on our property. My husband is 67 and I am 58. Our credit took a hit due to short sale and a few late payments during our move. I have just obtained a job and my husband’s retirement we have a monthly income of 4000. A month. Is there any possibility of a equity, or some type of loan. Thank you, Annette.

  7. sandra manbeck says:

    i have a double wide mobile home built in 83 i have it and land financed with a loan co. i am 63 would like a reverse done i am a widow please contact me sandra

  8. S. Bowman says:

    I have a 1978 mobile home with additions on 6.8 acres. Property has out buildings, fenced and cross fenced. Currently have an interest only loan and need a solution soon. Does my property qualify for a reverse mortgage?

  9. Lynn Pitetti says:

    I am in the process of having a manufactured home built on property I own. The cost of this home will be around $200,000 to build. It is my understanding that construction of a house is not eligible for a reverse mortgage. If this is the case, how long should I wait before applying for a reverse mortgage.

  10. donna says:

    I have a double wide built in the late 90′s. I Wii like some info on lenders.

  11. Cathy Kimbrough says:

    I have a “triple” wide, conventual loan, owe approx 30,000 and it sits on approx. 1/2 acre, in country. The home is approx 15 years old. I also own, free & clear 9.5 acres of grazing land. Would this qualify for a reverse mortgage?

  12. Chuck says:

    I believe you’ve told me in a previous e-mail you did not handle reverse mortgage loans in Arizona. So I’ve been dealing with a broker in Arizona. He has told me to “stand by” until the first week in February, that’s when they should here whether or not FHA is going to continue the program (program for double wide manufactured homes). Back on December 17th he told me… “Please standby until we get our underwriting dept to review our new procedures for Mobil Homes. This will happen the first of the Year. I think by the 10th of January”… I”m beginning to believe the company he represents may have lost the authority to handle the FHA reverse mortgages. Can you tell me if there is some sort of moratorium from the FHA regarding reverse mortgages on mobile homes? Any info you could provide would be greatly appreciated…

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