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

[Scott Baker]

@Mike Higgins This drives home my point that there is lots of confusion in the industry regarding "modular" homes. I am a custom home builder, so the modular side is new territory for me. I recently toured the factory where these mods are being built. What I am referring to is construction that is just like a stick built house. When the house arrives at the site it is on a steel trailer, but that is only for transportation. After everything is installed/complete, most people will never know it's any different from the average stick built house. 

 I actually talked with an appraiser friend this morning regarding this project. Sounds like the best option is to do the project in cash and then cash out refi after everything is complete and the tenant moves in. Unless someone tells the appraiser it is "modular" he will not know. BUT, if he/she does know about it they will have to disclose it to the lender. From what I know currently, that would knock me out of conventional financing. 

Here is cool article regarding Modular Homes. https://thelendersnetwork.com/...