FINANCING TERMS

Affidavit Of Affixture
A form required by titling agencies denoting that home has been placed permanently on homeowners land and is to be classified as real estate for taxation and lending requirements. Also known in some states as “Title Cancellation.”

APPRAISAL
A document required by manufactured home lenders to determine the appraised value of the home being financed. A licensed appraiser determines the value based upon size, quality, purchase price, and comparison to comparable prices (comps) of other manufactured homes sold in the surrounding neighborhood within the last few months. An appraisal report can be obtained for a manufactured home already on site or, in the event of a factory ordered home, the home and land may be appraised separately and combined when the home is officially on site.

Buy For
An individual who buys and finances a manufactured home for someone else. Lender must be aware and approve of a “buy for” at time of application. Most manufactured home lenders will not approve these types of applications.

Certificate Of Occupancy
A document issued by local or state building agency that certifies, following inspection, that home has been installed in accordance with all applicable requirements and may be safely occupied. This format may differ from state to state depending on whether or not the home is affixed to property. Lender will require a copy of this occupation certification prior to funding loan.

Chattel
Manufactured homes classified as personal property. In most states they remain personal property until they are legally attached to real property , then they are considered real estate and will only then be eligible for mortgage type financing.

End Loan
A loan that does not disburse funds until home has been installed, all site work completed, and home as been inspected and and certified for occupancy.

Engineer’s Certification
Most lenders require that a letter from a structural engineer certifying the foundation is in compliance with the HUD Publication, Permanent Guide For Manufactured Homes dated 1996.

FHA
Federal Housing Administration within the U.S. Department of Housing and Urban Development.(HUD)

FHA Loan Number
The number assigned by FHA to a particular borrower and property.

FICO Score
Credit scores that are composites that indicate how likely a person will pay on a manufactured home loan as agreed, based upon prior credit history, amounts of debt, length of credit history and types of credit in use. The manufactured home lender reviews the application for financing from a credit report and other data, including income levels in addition to existing debt and the additional debt after including the debt to be incurred with the manufactured home loan. Fair, Isaac, and Company (FICO) developed the mathematical formula to establish credit scores. Scores range from 300 (poor) to 850 (excellent), and the rule of thumb is the higher the score, the lower the risk to the lender.

Land Package
A method of financing a manufactured home, land, and site improvements with one loan.

Letter Of Commitment
A letter from a bank or other lender that agrees to loan a certain sum to buy a specific manufactured home on certain terms.

M.S.O. (Manufacturer’s Statement Of Origin)
A new manufactured home is not static-h3d until it is first sold to a retail customer.The manufacturer prepares a document (MSO) transferring ownership from the manufacturer to the retailer/dealer. This statement contains the physical static-p of the home, the assigned serial number(s), and HUD numbers attesting that the manufactured home has been built to the the federal requirements of the U.S. Department of Housing and Urban Development. The lender will use the information from the document to create titling or deed documents to be held as security for the manufactured home.

P.M.I (Private Mortgage Insurance)
Sometimes a lender will require that a manufactured home purchaser to pay a monthly payment that includes an extra charge that is to pay a private person or entity to insure the lender against partial loss if the borrower should default. P.M.I. requirement is more common with site built homes than manufactured homes.

Insurance Binder
Prior to funding a manufactured home loan the lender will always require that the home buyer provide proof of a prepaid physical damage insurance for at least one year. The lender will accept a binder from a recognized insurance company as proof of insurance pending the policy being issued.

Reverse Mortgage Loan
In a reverse mortgage loan, the borrower does not need to provide verification of income to procure a loan. The only determining factor for loan qualification is the assessed value of the home and the age of the borrower. In a reverse mortgage transaction, every foundation of the manufactured home must be inspected and and certified by an engineer to specify that it meets the guidelines of the Permanent Foundation Guide For Manufactured Homes dated 1996.

Underwriter
In manufactured home financing the term is used for the process of analyzing the creditworthiness of the of the property or borrower or both, based on credit history, appraisal of home, or other factors. The underwriter is often a different entity than the lender.