Modular Homes Financing

[Scott Baker]

I am looking for conventional financing options for modular homes. I am referring to a factory built home that is set on a permanent foundation. In some scenarios we are considering building the roofs on site (this will give us more roof line options) Concrete drive, sidewalk, covered porch and garage/carport will all be included.

I have asked two local banks and their immediate answer was no. They said they didn’t have any investors that would buy the loan. They did however offer 15 year in house options. My goal is to lock down 30 year fixed rate deals.

I feel like there is confusion surrounding the terminology.

One option that I am considering is using private equity to build it, then doing a cash-out refi after everything is complete and tenants move in. IMO no one would even know it was a modular home...

Any thoughts/advice on this subject would be much appreciated!

Thanks

[Eric Veronica]

@Scott Baker Modular home is treated exactly the same as a single family home.  Period.  

Manufactured homes are a different story.  They can be more difficult to finance.  Typically you can identify a manufactured home if you recognize the following 

- there is a HUD tag similar to a license plate affixed to the home. Usually there is a tag on the exterior of the home and the interior. Usually in a closet or cabinet

- There is skirting around the bottom of home's exterior

- Typically manufactured homes are built on a steel chasis

- Often times at the purchase you will pay sales tax

The confusion arises because consumers and a lot of folks in real estate use these terms interchangeably.  An appraiser disclosing that a home was a modular should not disqualify you for conventional financing.