Financing Options: Chattel Loans for Manufactured Homes
Home only loans, also known as chattel loans, are personal property loans made for the purchase of a manufactured home that is not permanently affixed to real estate. These loans are the most common and most utilized for financing manufactured homes and mobile homes. They are also the least complicated and most expedient. Not to mention require the least cash down payment. Chattel loans for manufactured homes also offer lower monthly payments than other types of so-called traditional home loans. Consider these qualifying facts that make chattel loans for manufactured homes the perfect fit for your mortgage:
Chattel Loan Qualification:
-In the U.S, 70% of all manufactured homes are placed on private property, primarily in rural areas, and often are not attached to real property and financed utilizing home only chattel loans.
-Approximately 30% of all manufactured homes are sold and sited in manufactured home land-lease communities (often called “mobile home parks”) and financed as home only loans.
-Typical home only loan interest rates are 3-5% higher than a traditional mortgage. Down payment requirements may range between 5% to 20%. Terms for these loans are usually capped at 20 years.
Today’s modern manufactured homes are comparable with traditional site-built homes in every respect, with an amount to finance about half that of a site-built home. Because of the large price difference, the initial cash investment in the form of a down payment will be much lower and the total monthly payment requirement, including space rental, will be considerably lower as well. This can all be had without sacrificing quality, amenities, or square footage. The manufactured home retailer selling the home will often include minimal site preparation costs within the total selling price and in the amount to be financed, if the retailer utilizes in-house personnel or an on-site contractor bearing their approval. Manufactured home only loans require less processing and documentation, dramatically reducing the time frame from application, approval, and delivery to home occupancy. Some lenders do not offer home only chattel loans on mobile homes built before 1976 HUD regulations for manufactured homes became effective, so keep this in mind when choosing a lender.
The Bottom Line:
Manufactured homes are perfectly equipped to qualify for chattel mortgages because they are not considered real estate, are personal property, and their total price keep the loan amount to a far more manageable rate and total than site-built counterparts. Manufactured housing financial institutions are much more likely to assist these kinds of loans because of their quicker payout and attractiveness on the secondary mortgage market. Using every advantage that manufactured home financing provides, such as chattel loans for manufactured homes, is the way to get through this housing crunch and into the home you’ve been searching for!