Can I get a reverse mortgage on a manufactured home?
Manufactured homes have gained popularity since 2008 and are a common housing option for seniors. However, there seems to be a lot of confusion as to whether these types of properties qualify for reverse mortgage assistance. So they? Or do you demand the characteristics of your specific home?
The rebound
These types of homes have seen a massive resurgence in popularity over the past eight years.
Warren Buffett and Berkshire Hathaway’s ability to survive and thrive during the 2008 crisis is largely attributed to the manufactured home company Clayton Homes. Billionaire real estate investor Sam Zell has continued to expand his community portfolio of manufactured homes through Equity Lifestyle Properties, even as he squanders billions of dollars on apartments from late 2015 to early 2016. Some Wall St. merchants even They have quit their jobs to invest in mobile devices and manufactured home parks.
Additionally, we’ve seen an explosion of vendors offering everything from tiny homes, 100% green and sustainable homes, and improved manf. homes for golf and resort communities in popular retirement and vacation areas.
So it seems that more people are choosing manufactured homes again and many have paid cash for them due to a shortage of loans. The big question is; Can they take advantage of reverse mortgages on these properties when they really need them 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.
Manufactured homes are eligible for reverse mortgages and home equity conversion mortgages by the U.S. Department of Housing and Urban Development (HUD). However, HUD also states that these loans are subject to FHA loan guidelines.
These guidelines change over time, but at a minimum, households should:
It will be built after June 15, 1976.
Be at least 400 square feet
Be attached to a permanent base or chassis
Be built to federal building and safety standards
It will be placed in its brand new original manufacturer location.
Be located on a property that you own
5 peculiarities to consider
1. FHA guidelines may change
2. If the property is in a community, the community may also need to be approved.
3. Current flood zone requirements could be affected as the government expands the standards to account for 500-year floods (compared to the previous 100 years)
4. Individual lenders can add their own claims in addition to HUD and FHA rules.
5. HUD requires a base inspection to ensure the base meets FHA guidelines.
Homeowners should also be aware that many lenders and brokers will simply dismiss manufactured home loan inquiries instantly. Why? Because many are simply not used to making these loans and do not want to bother learning. Others don’t want to deal with the smaller loan amounts normally associated with this type of property, vs. Let’s say luxury beach condos or giant loans for big houses. They just aren’t that profitable.
Summary
Better technology and building practices, as well as today’s economy, make manufactured homes very attractive and profitable as a home or investment today. It is possible to obtain a reverse mortgage on these types of properties. Just make sure you know which ones may or may not qualify, and try to stay ahead of the changing rules if you’re buying a manufactured home now. If you don’t find helpful lenders at first, keep looking, there are reverse mortgage specialists who love to make these loans and are very proficient at it.