Manufactured homes have surged in popularity since 2008, and are a shared housing choice for seniors. however, there appears to be a lot of confusion over whether these types of similarities qualify for reverse mortgage help. So do they? Or does it need on the features of your specific home?
These types of homes have experienced a enormous resurgence in popularity over the last eight years.
Warren Buffett and Berkshire Hathaway’s ability to survive and thrive by the 2008 crisis is largely credited to manufactured home company Clayton Homes. Billionaire real estate investor Sam Zell has continued to expand his manufactured home community portfolio by Equity Lifestyle similarities, already while shedding billions of dollars in apartments from late 2015 to early 2016. Some Wall St. traders have already ditched their jobs to invest in mobile and manufactured home parks.
Additionally we’ve seen an explosion of vendors offering everything from tiny homes, 100% green and sustainable homes, and upgraded manf. homes for golf and resort communities in popular retirement and vacation areas.
So more people appear to be choosing manufactured homes again, and many have paid cash for them due to tight lending. The big question is; can they leverage reverse mortgages on these similarities when they really need it later in life?
How to Get a Reverse Mortgage on a Manufactured Home
Yes, manufactured home owners can enjoy the benefits of reverse mortgages and lines of credit. But there are restrictions.
The U.S. department of Housing and Urban Development (HUD) states that manufactured homes are eligible for reverse mortgages and Home Equity Conversion Mortgages. However, HUD also states that these loans are unprotected to FHA loan guidelines.
These guidelines do change over time, but at a minimum homes must:
· Be built after June 15th, 1976
· Be at the minimum 400 square feet
· Be attached to a long-lasting foundation or chassis
· Be built to Federal Constructions and Safety Standards
· Be placed in its original location brand new from the manufacturer
· Be located on character you own
5 Quirks to Watch Out for
1. FHA guidelines can change
2. If the character is in a community, the community may also have to be approved
3. Current flood zone requirements could be impacted as the government extends standards to explain 500 year floods (vs. the past 100 years)
4. Individual lenders can add their own demands on top of HUD and FHA rules
5. HUD requires a foundation inspection to assure the foundation meets FHA guidelines
Owners must also keep in mind that many lenders and brokers will simply immediately dismiss inquiries about loans for manufactured homes. Why? Because many just aren’t used to making these loans and don’t want to bother to learn. Others don’t want to deal with the smaller loan amounts typically associated with this kind of character, vs. say luxury condos on the beach or jumbo loans for large homes. They are just not as profitable.
Better technology and building practices, in addition as current economics make manufactured homes very attractive and profitable as a home or investment today. It is possible to acquire a reverse mortgage on these types of similarities. Just make sure you are aware of which ones may or may not qualify, and try to stay ahead of changing rules if you are purchasing a manufactured home now. If you don’t find lenders helpful at first, keep shopping around, there are reverse mortgage specialists who do love making these loans, and are very efficient at it.