Loans for Manufactured Homes on Leased Land
Land Leases and Financing a Manufactured Home in Michigan
There are a multitude of reasons why more people than ever are looking to manufactured homes and financing is one of the common reasons.
Not only is it more affordable, in many cases, to finance a manufactured home compared to buying a site-built new or resale house or condo, it is also much more attainable in terms of qualifying for an approval for financing.
Not only will it be a lower mortgage you need to qualify for and thus a lower down payment (meaning you have a better chance of qualifying versus a mortgage for home $100K+ more expensive), but there are also programs designed to help people get into a manufactured home, such as in-house financing from mobile home manufacturers and communities that want to help you get into your own home.
Manufactured Home Loans: In-House Financing
Loans from manufactured home communities are often available in the state of Michigan. Many communities will offer financing as well as land leases and work with you to help you get approved, even with a smaller down payment. The best way to find out about this is to learn more about communities with available homes as well as their financing and approval process.
A Bit About FHA Loan Requirements for Manufactured Homes
Can you apply for an FHA loan with a manufactured home? If you opt for a manufactured home with MMHI Standards (Model Manufactured Home Installation), approval is possible, but there are many caveats, including the fact that older homes (older than 1994) won’t qualify and that it cannot be on leased land.
Your income, credit history, debt ratio, and other factors are also taken into consideration in the approval process and as land lease options are not available as part of this process, there is an extra cost to consider in order to purchase land to build your home on.
This isn’t always feasible, particularly for those on a tight budget and who want to live in established communities with amenities. The good news is that with in-house financing, FHA loans aren’t necessary.
About Land Leases and Financing
Land lease scenarios involve buying your manufactured home in an established land lease community. In addition to a mortgage payment, you’ll have a land lease payment.
In this scenario, banks often provide 5 to 10% down payment financing opportunities to help you be able to get you into your own home.
As the land is leased, this tends to be much more affordable than buying land, also ensuring the right utility services (electricity, water, sewer, etc.) are in place, and you benefit from an established community with assorted amenities.
Is it Worth It?
Because of the substantially lower cost of manufactured homes, people tend to find them much more affordable to live in, even with an additional land lease payment. And keep in mind that because you’re leasing, you won’t have to factor annual property taxes into your budget. This effectively keeps manufactured home loan rates low.
While some people may have a bit of work to do with their credit score and / or have a down payment to save for, the likelihood of approval in a manufactured home community is high. For those who need to work on credit score and saving for a down payment, many communities also offer rentals with the option to purchase later on, helping you get into a home that you can eventually purchase, saving you the hassle of moving repeatedly.
Whether you are buying with a traditional home loan or are looking at options for in-house financing or other options for manufactured home loans, this affordable lifestyle can offer you a beautiful place of your own to live where you’ll have pride in ownership, luxuries, amenities, affordable cost of living, and more freedom.
Our land-lease communities offer affordable options for those seeking to finance their manufactured home. If you would like to apply for a manufactured home loan, contact our team at HomeFirst Certified today!