A Smart Investment

The purchase price isn't the only factor in determining affordability. The size of the down payment, interest rates, length of the loan and loan qualification requirements all weigh in. It is important to shop for a loan as carefully as you shop for your home.

This section provides useful tips on how to finance your home, including how to find the right loan and the right lender for you.

Types of Loans
Lenders
Loan Process

An Array of Possibilities

Personal Property Loans
A manufactured home purchased separately from its lot is financed as personal property. These loans are similar to those made on cars, boats, and other major purchases.

Generally they require a 10 to 20 percent down payment and are financed over 10 to 25 years. Interest rates are usually one or two percentage points higher than those for real property loans, and can either be fixed or variable.

Buyers who locate their homes in land/lease communities or "parks" use personal property loans. These can cover both the cost of the home and lot improvements such as walkways, porches, carports, and garages.

Real Property Loans
Homes purchased as a package with land are considered real property and are financed with the same kind of long-term mortgages as site-built homes. These loans are available only for permanently-located homes. Land/home packages, as these loans are often called, come in a variety of forms. Depending on the lender, they can be virtually identical to conventional home loans with 30-year mortgages and competitive interest rates. Often lenders have several programs to choose from that offer fixed or variable rates, a variety of loan terms (lengths), and other options.

Construction-type Loans
In some cases, land/home packages for new homes are modeled after multi-disbursement construction loans. These loans allow the buyer to pay off the land seller, home dealer, and different contractors at various steps in the purchase and development process.

If the land/home package is not a multi-disbursement loan, funds may not be available to pay the land seller and contractors until the project is complete. It is not unusual for these parties to wait for several months for their money.

Federal Programs
The Federal Housing Authority (FHA) makes Title I loans available for personal property loans for manufactured homes. These loans, like most federal programs, generally offer lower down payments and interest rates and are available through a variety of lenders.

Land/home packages may qualify for federally-guaranteed FHA Title II loans, and loans through the Veterans Administration and Farmers Home Administration. Designed for first time homebuyers, these programs offer low interest rates and down payments to qualified consumers.

State Programs
Many states make below-market-rate home loans available to first-time home buyers. Participating lenders will have specific information for your state.

Select the Right Loan for You

Consider your budget and your future plans. What's right for you?

Size of Down Payment
Many first-time home buyers want low down payments.

Monthly Payments
Everyone likes low monthly payments, but this may not be as important to some as others.

Loan Term
The older you are, the shorter length of loan you may want to consider.

Fixed or Variable Rates
Fixed rates never go up. Young people may prefer a variable rate that goes up as their income grows to accommodate it.

Select the Right Lender
Be sure to work with a lender who understands manufactured housing.

You will most likely find the right lender at banks and mortgage companies -- and you'll find that some are better than others.

Look for someone with experience in manufactured home loans. Make sure this is someone you feel comfortable with - someone who listens as well as explains.

A good way to start is ask local home retailers who they work with, then comparison shop. Look at fees and limits. Don't be afraid to ask questions.

2-10 Home Buyers Warranty
1728 Montreal Circle
Tucker, GA 30084
770-496-4970

21st Mortgage Corporation
PO Box 477
620 Market Street, Ste. 100
Knoxville, TN 37902
800-955-0021 x-1735

ACC Funding
988 Escondido Ave., Ste. B
Vista, CA 92083
800-578-4022

AD&S Agency and Lender's Services
5463 SW 34th Place
Portland, OR 97239
503-245-5842

Budget Finance Company
1849 Sawtelle Blvd., Ste. 700
Los Angeles, CA 90025
800-225-6267

Cascade Land Home Financing
6816 E. Brown Rd.
Mesa, AZ 85207
877-869-7082

Collateral Management Services
PO Box 117
Nehalem, OR 97131
503-703-9290

Crown Homes Inc.
1255 Rogue River Highway
Grants Pass, OR 97527
541-471-9001

CU Factory Built Lending, LLP
33801 1st Way S #100
Federal Way, WA 98003
866-595-7228

Eagle Home Mortgage
20415 72nd Ave. S, Ste. 180
Kent, WA 98032
253-395-3888

First American Title Insurance
PO Box 10146
600 Country Club Road
Eugene, OR 97440
541-484-2900

GE Capital Solutions
13110 NE 177th Place, PMB105
Woodinville, WA 98072
425-844-1027

Golf Savings Bank
6100 219th St. SW, #440
Mountlake Terrace, WA 98043
425-673-8286

Home Choice Mortgage
2962 Limited Lane NW, Ste. B
Olympia, WA 98501
360-709-9191

Land Home Financial Services
2042 Wooddale Drive #160
Woodbury, MN 55125
888-796-5263

Origen Financial
4250 N Freeway
Fort Worth, TX 76137
817-759-7662

Sound Community Bank
PO Box 34155
Seattle, WA 98124
206-448-0884 x-203

Textron Financial Corp.
7395 SW Canyon Lane
Portland, OR 97225
503-297-5524

Triad Financial Services, Inc.
18107 NE 26th St
Vancouver, WA 98684
360-921-9724

Triad Financial Services, Inc.
4336 Pablo Oaks Court
Jacksonville, FL 32224
904-223-1111 x-282

US Bank - Manufactured Housing Finance
1025 Northpark Drive, Ste. C
Ridgeland, MS 39157
601-326-3068

US Bank Manufactured Housing Finance
14968 S Haida Court
Oregon City, OR 97045
503-518-3118

US Financial Network, Inc.
2500 Elm Street, Ste. 11
Bellingham, WA 98225
360-738-0808

Wells Fargo Home Mortgage
814 E. Jackson, Ste. C
Medford, OR 97504
541-858-1643

The Loan Process

Before you make a decision on the home you want to buy, sit down with one or more lenders to learn more about loan options an how much you can realistically borrow.

You and your lender will go over your income and assets as well as what you owe. This process is called "pre-qualifying" for a loan. It doesn't guarantee that you will get a loan, nor does it obligate you to any lender. It does, however, give you solid information on how much you can afford to pay for a house. And, it helps you establish a relationship with a lender you like and trust.

You can apply for your loan once you have selected your house and your land or leased lot. The application process generally begins with a completed worksheet of the costs of all items, including the home, land and site improvements, a signed credit application, application fee, a signed verification of employment and the amount of money in your bank account.

Loan approval may take anywhere from a few days to as long as several months, depending on the lender and the type of loan. FHA real property loans, for example, may take more time for approval than a standard personal property loan.

Letter of Commitment and the Appraisal
When your loan has been approved, your lender usually will give you a letter of commitment which spells out the conditions for approval. These include such things as the need for your home or land/home package to be appraised at a value equal to or higher than the amount of the loan.

Personal property loans for manufactured homes do not always require a formal appraisal unless the appraisal assists in the lending transaction. Instead, they are calculated by using a formula.

When a home is purchased with land, the loan amount is based on the appraised value of the home, land and any improvements. The comparable value of similar homes will be used to help determine the value of your home.

Some lenders use both site-built and manufactured homes to determine comparable home values, while others look only at similar manufactured homes.

Siting Your Home
If you are buying a house already located on property, you proceed to closing at this point. If not, your house will be delivered from the home retailer or factory and set up on your lot.

As the home is sited, inspections and sign-offs will be required by the building department, health department, and home retailer. When this step is completed, the loan may close.

Closing The Loan
Closing takes place at the lending institution or at an independent escrow office where all documents come for final review and signatures. All remaining funds from you are due at this time, including the balance of the down payment, lender's discount points, closing costs, and escrow fees. The lender or escrow agent will make all payments that must be made to the home retailer, contractors, land seller, and any others involved.

The home is now yours!