Manufactured Home Financing in Washington, Oregon and Idaho

Fannie Mae, Freddie Mac, FHA, VA and USDA all finance manufactured homes, each with conditions. Fannie Mae, for example, requires the loan to be secured by both the home and the land, with both classified as real property under state law, and does not allow manufactured homes on leased land outside approved condo or PUD projects. See Fannie Mae's manufactured housing eligibility rules (opens in a new tab).

Homes in parks on rented lots are typically financed with chattel loans, which work more like auto loans: shorter terms and higher rates. HUD's Title I program (opens in a new tab) can insure some of these loans.

Manufactured homes are built on a chassis and come with a certificate of title, like a vehicle. To be treated as real estate, that title has to be eliminated and the home tied legally to the land. Washington, Oregon and Idaho each handle this through their own titling agency and the county, so the steps differ by state.

Practical advice:

• Ask the seller early whether the home is already classified as real property. Many older homes on rural land were never converted.
• If conversion is needed, the title company and lender coordinate it, often as part of closing. It can add time.
• Make sure the legal description in the deed and the serial numbers on the home's data plate match the documents.

HUD-code homes have a red metal HUD certification label on the exterior of each section and a data plate inside, usually in a kitchen cabinet or closet. Appraisers and underwriters look for both. If labels are missing, a replacement verification letter can sometimes be obtained, but it takes time.

FHA also generally requires that the home has not been previously installed at a different site. Moved homes are a frequent sticking point, so ask the seller about the home's history.

Common issues that hold up a manufactured home loan:

• Skirting that is present but no permanent foundation underneath.
• Missing or inadequate tie-downs and anchoring.
• Crawlspace moisture or settled piers.
• Unpermitted additions such as decks, carports or attached rooms.

If a foundation needs work, it can sometimes be completed before closing at the seller's expense, or financed through a renovation loan. See HUD Handbook 4000.1 (opens in a new tab) for FHA standards.

Program notes:

• FHA is common for manufactured homes because of its flexibility on credit, with HUD's specific property requirements.
• VA finances manufactured homes on permanent foundations for eligible borrowers.
• USDA guaranteed loans finance eligible manufactured homes in eligible rural areas, with rules on age and installation.
• Conventional loans from Fannie Mae and Freddie Mac finance manufactured homes as primary residences (and, for multi-width homes, as second homes under Fannie Mae's rules), but not as investment properties.

Lender overlays vary widely on age, size, foundation type and acreage. That is one place a broker's lender network helps.

When comparables are scarce, appraisers may use older sales or sales from farther away, which can lower the value or add conditions. Knowing the home's age, size, foundation type and improvements up front helps set expectations.

Placing a new manufactured home on land you own is a construction-style transaction; ask Frank what his lenders offer for it. To talk through a specific home, schedule a call. Any figures discussed before underwriting are estimates only, not a commitment to lend.