Owner financing my mobile home. Yes or No?

Question

Good evening BP. I have invested in a mobile home in the Zellwood Station 55+ community and it is going to be placed on the market any day now.  I understand it is hard to get conventional financing on a mobile home, and I am starting to consider owner financing.  What are your experiences with owner financing?

Armando Raygoza · Answer

Hey @Drew Shofner, is the home on permanent foundation or leased land? My wife has been in the manufactured home industry in Orange County, CA for five years and obtaining financing is not usually a problem. Not sure it would be much different in Florida. The most popular lender nationwide is 21st Mortgage, a Berkshire-Hathaway Company. Down payments can start around 5-10% down for "full-doc" (W-2 wage earners), average credit applicants. A FICO can be as low as 600 before lender requests additional down payment. If you have a very qualified client (FICOs above 680) you can try other lenders such as Triad Financial or CU Factory Bilt Lending. We would probably recommend looking for Mortgage Brokers in your area who specialize in chattel mortgage. She has also worked with owner financed mobile homes. It is very easy to set-up through your escrow company using a "note and security agreement." Most owner financed mobile homes have been with more than 50% of the purchase price as down payment with an interest rate anywhere around 10-14%. Make sure to screen applicants, run credit, and verify their housing/debt-to-income ratios.

Drew Shofner · Answer

Thank you guys for your input

Bill Ayers · Answer

That is all I do. My formula is that I want to get back my investment within 9-18 months through the initial down payment and monthly payments of $300. Typically, I am looking at 60 months of payments. I will of course consider cash offers if someone wants.