January 8, 2013
A reader asks, “What requirements does a factory built home (manufactured or modular)have to meet to qualify for FHA financing? I am particularly interested in any “age” limitations/recognitions/requirements/etc.”
It’s true that there are FHA loans for certain types of mobile homes/manufactured homes, modular homes, etc. During the housing crisis, these loans were more difficult to come by; many lenders were not willing to underwrite FHA loans on these types of properties. But with a recovering housing market and rising property values, some borrowers are finding their lenders willing to consider these types of FHA loans once more.
To answer the reader’s question, it was necessary to reference the Department of Housing and Urban Development’s Frequently Asked Questions database, which states;
“To determine basic eligibility for FHA mortgage insurance, all manufactured homes must comply with the following:
1. Have a floor area of not less than 400 square feet
2. Be constructed after June 15, 1976, in conformance with the Federal manufactured home construction and safety standards, as evidenced by an affixed certification label in accordance with 24 CFR Section 3280.8; (manufactured homes produced prior to that date are ineligible for insured financing)
3. Be classified as real estate
4. The mortgage must cover both the manufactured unit and its site and shall have a term of not more than 30 years from the date amortization begins
5. Be built and remain on a permanent chassis
6. Be designed to be used as a dwelling with a permanent foundation built to FHA criteria;
7. The finished grade elevation beneath the manufactured home or, if a basement is used, the grade beneath the basement shall be at or above the 100-year return frequency flood elevation
8. The home must not have been installed or occupied previously at another site or location”
Those are the basic rules, in a nutshell–there may be additional requirements or regulation, but if the manufactured home doesn’t meet these basic requirements, the loan won’t be approved. There are naturally several additional questions that arise from some of these eight requirements.
“Classified as real estate” basically means the home must have a final disposition that includes being anchored to a permanent foundation. House boats, RVs and other vehicles would not qualify for an FHA mortgage as described here.
“Designed as a permanent dwelling” would seem to rule out FHA loans for construction trailers as seen on many development sites or similar structures–the manufactured home must be equipped for long-term, permanent residence.
If you have further questions on the rules for manufactured homes and FHA loans, discuss your situation with a loan officer or contact the FHA directly at 1-800 CALL FHA.
Do you have a question about FHA home loans? Ask us in the comments section.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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