Manufactured Housing

Written By: Bonnie Wilt-Hild
Senior DE Underwriter & NAMP Instructor

Due to the increase in the number of questions I am now fielding regarding manufactured housing, I thought this week would be a good time to discuss the guidelines for such properties when applying for financing using FHA insured mortgage programs. FHA actually has a very nice program set up to financing manufactured homes under the 203b program as well as other programs available for the same under Title I programs, however, today I am going to discuss financing under the 203b program.

FHA will allow financing for manufactured homes under the standard 203b program with few exceptions or program deviations. When origination a mortgage on a manufactured home the same standard forms and disclosures are required from an origination standpoint.

Additionally, LTV guidelines and credit criteria remain the same. Appraisal requirements vary slightly as the appraiser must include additional information where the unit is concerned; however, for the most part there is no real significant difference. Case number assignment requirements, appraisal logging requirements remain the same as do required submission documents including the Conditional Commitment.

With that covered lets talk about the additional requirements for manufactured housing. To be eligible for FHA mortgage insurance, all manufactured housing must meet the following requirements:

1. Have a floor area of not less then 400 square feet.

2. Be constructed after June 15, 1976, in conformance with the federal manufactured home construction and safety standards as is evidenced on the affixed certification label (HUD tag). The HUD tag must still be intact on the unit and the appraiser should provide a photograph.

3. Be classified and taxed as real property and located on a lot that is conveyed as real property.

4. The mortgage must cover both the manufactured home and site and have a term of not more then 30 years.

5. The manufacture home must be built and remain on a permanent chassis.

6. It must be designed to be used as a dwelling with a permanent foundation.

7. The lender must obtain a certification of foundation from an engineer prior to loan closing for both purchase and refinance transactions.

Other criteria as set forth for any standard 203b mortgage to be insured under the FHA mortgage insurance program applies with respect to ratio guidelines, employment criteria and the like.

Additionally, UFMIP and monthly MIP premiums amounts are the same as with any 203b program. Further information regarding this property type can be found on FHA Connection.

Keep in mind FHA will insure them when underwritten to their guidelines but investors in the secondary market have implemented some instruction of their own or have opted not to purchase them at all. Make sure to check with your investors to determine where these mortgages can be sold. As always, happy underwriting.

About the Writer. As an NAMP staff writer, Bonnie serves as a senior instructor for FHA Online University as well maintains a full-time job as Senior DE Underwriter for a major banking institution. If you would like to become a writer for NAMP, please email us at: blog@mortgageprocessor.org.