Feb. 11, 2016
Looking to Downsize?
Find a more Affordable home?
Manufactured Homes - a solution to consider!
I've had several clients recently searching for manufactured homes. So, being curious, I decided to learn some more about them as homes, go tour some sites, see new homes as well as old and discuss with these clients their plans. I was very surprised with what I found in the community parks and especially the new homes! They were spacious, on nice lots in gated communities, some with 9' ceilings, hardwood floors, granite/solid stone counters, dishwashers, decks, crown moulding, double pane windows, plaster walls and solidly built. I also learned that there are remodeled homes, where a builder will completely remodel a home: new flooring, walls, lights, kitchens, appliances, baths, and even granite counter top! Not the mobile homes of the past with thin vinyl walls, aluminum siding and maybe a gravel carport.
And the reasons my clients were interested, they could buy them cash from the proceeds of the sale of their homes, not have a mortgage, still remain close to family and friends, have their own home, not be in a multi-unit condo or apartment building and also have time to travel. It met their needs in terms of price, value and conveniences.
First, to better understand,, these are not the "mobile" homes I had been accustomed to growing up in the midwest or in passing mobile home parks. You know the ones that always get hit by the tornados. Some of my clients were "downsizing" others have just been on a budget and wanted to have a custom home, purchased for cash, that would not consume all their funds, yet provide a safe, stable home and peace of mind. Another client was starting a new business and wanted a safe home but wanted to focus his investment in his business.
Second, since 1976 these are now build to the Housing and Urban Development (HUD) national building standards. If they are fixed to a permanent foundation and permitted by the local building development they are treated as real property for tax purposes. If they are instead placed on "blocks" they may be taxed as personal property. Buyers should always with the local park and communities to determine the tax implications when determining the budget impact. In general, homes built after 1980 are listed on the local property tax roles, while those built before 1980 may be treated as personal property unless the owners have initiated a change.
Third, though the one we were looking at for my clients are in community parks, more than 70% of manufactured homes are sold to private property owners who place them on their own land. Much less expensive than a conventional "stick" home, delivered on a timeline and installed on a foundation, ready to go!
Fourth, if they are purchased with land they can be financed with conventional 20 and 30 year mortgages.
Finally, being factory-made they are built to quality controlled standards, using the same materials as "stick built" homes (plaster-board, moulding, plumbing, roofing, 2x4 studs, etc) and are 10-20% less per sqft than site built homes. (Source - Manufactured Housing Institute - Quick Facts 2014)
Serious about this and want to talk about buying one?
Here is some helpful information to review.
1) Age of the Home - homes built before 1976 may require special financing solutions, such as a higher down payment so the buyer needs to find an experienced lender to assist. Homes built after 1976 have more flexible lender solutions. When we talk I can explain further.
2) Lenders - the number of lenders that will offer loans are limited and specialized. You will need to speak with a lender and get "pre-Approved" so we know how much you can afford in a home. You will need this before you can make a purchase offer, unless you are buying cash and do not need a loan.
Community Park Financing Information - Some park approval requirements of buyers may include:
- History of Foreclosures, Short Sales, Bankruptcies,
- No Investors, Buyer must be signer,
- Age Limitations - if a Senior Park owners must be 55+ years of age,
- Have at least qualifying lender FICO score and generally No Co-signers.
Here are a few links to some lenders that work with Manufactured Homes:
3) Types of Parks: Senior (55+) vs Family - view the same link above to see a list for all the various parks in the East Bay.
4) Park Applications - you should get approved by the park management before making a purchase offer in a park. The park management all use their own application forms so you will need to contact them to get their forms. All parks will require good credit, no criminal records, and monthly income that is at least 3x the cost of their rent per month.
Follow the link below to see some folders online with Park Application materials:
5) Next Steps - Tour Homes - With all this being completed, then we can begin to tour homes and when you find the one you like, we can make an offer to purchase. I can set a search on my website for the locations you are interested in so that you will start to get email updates. See one you like, mark it at a Favorite and I will begin the due diligence to check on our next steps.
6) After an Offer is Accepted -
- Home and Pest Inspections - just as with any home purchase, you will want to have the home inspected. As in the lenders, there are select inspectors that work on Manufactured Homes, so give us a call for a referral for your area.
- Closing Process - the process with a Manufactured home is not as stringent as a Private Home or Condo and if a cash transaction can usually can be done in days instead of multiple weeks. If financed, the closing may take a similar amount of time (30-45 days) as a conventional single family home or condo. Again there are select Title/Escrow companies that are experienced in these transactions so to reduce your timeline, give us a call for a recommendation.
7) Additional Resource Information
- Insurance Providers - after the offer has been accepted, you will need to get insurance coverage for the home. As a courtesy, below are some insurance firms that write coverage for mobile homes:
Louella Sigua Farmers Insurance, 925-930-0307, email@example.com
Janet L. Macedo, Wiebel Insurance Agency, 800-653-5565
Have you ever considered a manufactured home? If not, why not? Interested in learning more? Call me!