How to buy a manufactured home

Mobile homes, Modular homes, Manufactured homes, what is with the new appeal?

We get calls almost daily from people wanting to purhcase a Manufactured home.  When asked what the big draw is or why it is they feel this would be a good move for them most often the answer is, well who can afford anything else and I don't want to live in a condo.

First question to ask..... "Is it in a park"? 


What is the difference between Mobile home, and Modular/Manufactured homes?

•  Technically they can be the same, difference is typically whether they are in a park and registered the the manufactured home registry or not.
•  If it is in a park and not fixed to a permanent properties are typically lower in price than those that are attached to a foundation. These properties have an added pad rental often up to $500/month.  They are registered in the Manufactured home register and have a CSA # and require special financing not a standard mortgage.  The exception is if you are buying in a park where you own your own land (therefore no PAD rental)
• A manufactured home which is fixed to a permanent foundation; differs in that you own the land that your home is attached to as well. These are mobiles which have been registered and can be registered in land titles as a standard mortgage charge.

The draw: What is so appealing??

• Sticker Price $$$
• An MLS search will show you can see why a Mobile/ Manufactured home would be appealing, often you have a 2 - 3 bedroom home with a yard and the cost is a fraction of what a single detached would cost.  Often even lower than a condo. 

The Misconception: Low purchase price, low down payment, low monthy payment

•  Due to the low purchase price the payment will be low - often the payment is higher as they cannot amortize it as long as a standard mortgage.  Typically at higher interest rates than standard mortgage loan rates.
• In order to put 5% down payment on a Modular home it must be less than 15 years old and be fixed to a foundation and deregistered from Manufactured Home Registry.  There are considerably tight restrictions and limited lenders who will finance a Manufactured home,   Most of these are found in Northern communities on acreage.
• You cannot put 5% down on a mobile in a park.  

How can you own a Mobile home in a park?

• This is considered a collateral charge loan, much like purchasing a vehicle or trailer.  The loan is based on the value of the building not including land and is financed at regular loan rates (rather than bank mortgage rates).  Typically this means you will have a shorter term than a mortgage so it can be paid off faster but the payments would be higher than a standard mortgage.
• The majority of Mobile home owners purchase these properties as a way of downsizing.  They pay cash and only have a pad rental.   
• Best options for finding financing for these properties is you local credit union.   
• To register a mobile  

How can you own a Manufactured home on its own land?

• These are case by case, based on the age of home, size of land and where the Modular is located.  Typically if the home is older or needs updates the value would be in the land and therefore a larger down payment would be needed.  Typically 25-35% down payment is required but this in lender specific so it varies. 
• Often a local credit union near the proeprty will consider financing.  Your realtor can pull a title to see who has the current mortgage is there is one; this is often a good start.  

Can a mortgage broker obtain financing for Manufactured homes?

• We do have lenders who will finance Manufactured homes, although not if it is in a park and registered.  The more you have down the easier it is to finance but if the property is on it's own land and deregistered a mortgage broker can obtain financing; again, it is dependant on the age of property, location and size of land.  With 25-30% down you have a very good chance of obtaining an approval. Less than 20% down will require less than 15 years old and typically on nder 10 acres of land but this is lender specific.  Talk to your mortgage broker about properties you are interested in before making an offer.  
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