Since a single family modular home is built to a local building code just like a regular home, it is also financed just like any other home. US Modular’s lender partners understand the modular construction process and can help you obtain a construction loan and a permanent mortgage for your home. For Manufactured Homes, we have lenders that deal specifically with park or private land models.
US Modular lenders offer excellent financing for both land and home projects in either UBC (local building code for modular buildings) or HUD (manufactured) financing for planned communities through our approved sources.
- Terms up to 30 years, both conventional and FHA
- Short term construction loans
- Construction to perm loans
- Vacation homes
- Spec home construction
- Stated income for self-employed
- UBC (modular home) financing
- Competitive rates
Multi family / commercial projects that are built using modular construction are a bit more involved than a single family home mortgages. US Modular financing partners are experts in helping you obtain the most appropriate loans for your project. They will evaluate all available options for your project to ensure you have the best loan or the best rate possible!
Financing Options for Manufactured or Modular Homes
Are you intimidated by the home financing process? Don’t worry – USModular, Inc. can help you every step of the way, answering questions and making sure you are getting the loan terms tailored to your budget and your specific needs.
Obtaining financing for your manufactured or modular home is easier than you might think. Several loan options are available for borrowers regardless of income or credit status. Click on the links below to discover which loan type is best for you, and for information on interest rates and a down payment.
USModular, Inc. also has lenders who provide construction financing, so you don’t have to get a land loan to purchase the property. We have the ability in many cases to help you save money by combining costs into one construction loan with draws to pay the seller of the land.
You will need to make sure your contract for the land purchase is written to provide enough time to find all costs necessary to develop the land, and fund your construction loan. Please talk to the experts at USModular, Inc. before you make an offer on land.
At USModular, Inc., we’re here to make the loan process as easy as possible. If you need more information about any of the available financing options listed below, please contact us.
- Construction Loans
- Conventional Loans
- FHA Loans
- Cal Vet Loans
- VA Loans
- Chattel Loans (Non-Permanent foundations only)
- Reverse Mortgage
- Interest Rates
- Down Payment
- Using Property Equity for your Down Payment
- Insurance Funds for Fire Victims
The use of a one time close construction loan with a land/home project allows you the ability to finance your project including land, by funding the construction loan once all costs are in for the project and the appraisal is complete, to determine value.
Construction loan costs are often higher than the standard conforming loan costs and are determined by your loan amount.
- Once your construction loan is approved and funded, the land seller is the first person to be paid off, so that you the buyer now owns the property and can begin planning for the new home.
- We offer FHA, Conventional and VA construction loans.
- If you use a FHA or VA construction loan there are no payments made during the term of construction and no additional loans are required. The FHA and VA loans will finance in interest for the term of construction.
- If a conventional construction loan works best for you, you will be responsible for interest only payments on the funds released through the term of construction and no additional loans are required. All funds are disbursed as required with signatures on each draw from both the buyers and the dealer.
- General construction loan terms range from 4 to 6 months from the date the construction loan funds.
- This type of loan requires that you have open credit lines and good credit.
- If you have had a bankruptcy, a lender will require that the bankruptcy to have been discharged for at least three years and you must have reestablished good credit.
- This type of loan is geared toward the buyer with a good to excellent credit rating.
- Conventional loans will allow financing for buyers who have sold a home in a short sale or had a home foreclosed on, two years from the date of the foreclosure and/or short sale was sold with a 20% down payment.
- The FHA loan is a government insured loan which allows FHA underwriting guidelines to be more flexible than a conventional loan.
- FHA loans do have a few more requirements than the conventional loan, such as mortgage insurance.
- The FHA loan is geared for the buyer with low down payments and average credit.
- If you have gone through a bankruptcy, a lender will require that the Bankruptcy have been discharged for at least two years and you must have reestablished credit.
- FHA loans will allow financing for buyers who have sold a home in a short sale or had a home foreclosed on, three years from the date the foreclosure or short sale home was sold.
- The VA loan is a loan offered by the Department of Veteran Affairs to veterans.
- The VA loan requires an honorable Discharge from the military.
Chattel Loans (Non-Permanent Foundations Only)
Chattel Loans are loans for buyers whose home will be placed on a non-permanent foundation.Chattel lenders require a minimum credit score of 590 Buyers with a lower credit scored are required to have a larger down.Chattel Loans are considered personal property. Your credit score and down payment will determine the interest rate for your Chattel loans; however, they start at about 7%.Although Chattel Loans are considered personal property loans, you still do have the choice to either have a 20 year or 25 year term loan in most cases.
There are several loan programs out there for new manufactured or modular homes backed by the federal government. These include programs like the FHA, VA and USDA. These are great programs for first time home buyers looking to keep their initial investment low. Make sure you plan ahead if you choose to go this route as these loans take a considerable amount of time. Since government funds are used to back these loans, there is additional site work required to be in compliance such as a permanent concrete foundation. These loan programs do offer some of the lowest interest rates and down payment packages available. Keep in mind that you as the consumer are charged for this in the form of private mortgage insurance. This is an amount billed monthly as part of your escrows that protects a lender in the event of a foreclosure. Below is a list of links to three of the most popular government back loan programs currently available:
- A Reverse Mortgage is perfect for individuals over 62 years of age who would like to upgrade their current home with a new manufactured or modular home. The amount of funds available for your project is based on your age, appraised value of your property and current interest rate.
- Reverse Mortgages have no effect on your Social Security or Medicare. Everybody qualifies! Even if you have bad credit, you qualify. There is no asset or income verification required. And the deed for your property always remains in your name.
- You will have ZERO monthly payment, EVER! And there is ZERO down payment required.
- Interest rates for construction loans are often higher than the standard conforming loan through the construction phase. Once the construction loan rolls over into a conforming loan, the rates are then the same or close to the conforming rates.
- Interest rates for manufactured or modular homes on permanent foundations are equivalent to site built home interest rates.
Minimum Down Payment Requirements
- Conventional loans usually require 20% down
- FHA loans require 3.5% down
- VA loans require ZERO down
- Chattel loans generally require a minimum 5% down. There is an option for 10% which will allow you to option for the maximum loan term of 25 years.
Benefits of owning your own property by Using Equity as Down Payment
- If you own property and have owned your property for at least one year or more, you may be able to finance your home with ZERO down payments, by using the equity in your land as the down payment.
- How this works: Once you have given a lender all of your cost associated with building your manufactured or modular home, a lender orders an appraisal. The property is then appraised as if the new manufactured or modular home is sitting on the property and permanently attached. Once a lender receives that appraisal, a lender will take the equity in your property and apply that number to your loan as a down payment. This means that you can complete a manufactured or modular home with ZERO money out of your pocket.
Insurance Funds for Fire Victims
USModular, Inc. has many years of experience working with major insurance companies to help fire victims such as those who lost their homes to wildfires in California replace their lost or damaged homes. Many insurance companies work differently and we work with them to make the process equitable and fair for all parties involved in this transaction.
Benefits of Buying a Manufactured or Modular Home with Cash
There are some benefits to purchasing a manufactured or modular home with cash instead of financing. Most banks charge upfront fees for writing the loan. These fees are then tacked on to the principal balance being financed for the home. When you purchase a new single wide or double wide with cash, you avoid these fees along with any bank interest.
The loan process also takes a considerable amount of time. The cash closing for a new factory built home can be done the same day in most cases. If the home is already built, your home can be delivered once your three day right to recession has passed. If you and your family are in an emergency situation and need your home right away, you may be able to sign a waiver, waiving your 3 day right to recession.
What Do the Banks Look For?
There are a number of factors the banks will look for when determining if they will offer you financing for your new manufactured or modular home. Each bank has its own unique set of criteria for determining the criteria, however; these are some factors that all banks tend to consider:
Your credit score is a number that gives the banks a snap shot of your financial past. This number factors in things such as payment history, credit utilization and length of your credit history. The higher the number, the better your credit. There are three credit bureaus that each produce a separate credit score for you. Some banks may only look at one, where others will look at the middle of all three. It is important that you as a new home-buyer know where you stand with regards to your credit score so that you are aware of the financing options available to you.
Debt to Income Ratio
The banks also look at the ratio between your current debt to income ratio. This is commonly referred to as your DTI. Your credit score is important; however, a low credit score can be offset with a higher down payment. Banks are legally not allowed to lend you money if they determine you do not make enough money to cover your current debts and the addition of a new mortgage payment. Items that show on your credit reports as monthly obligations will factor into your DTI. So will things like child support and loans you co-signed for.
When figuring your debt to income ratio, the bank looks at all the expenses associated with your home purchase. This includes items like lot rent, land costs, taxes and homeowner’s insurance. If a family member is allowing you to place your home on their property at no costs, make sure you disclose that to the banks up front.
At a minimum, the banks will need to see a 2 year work history. This does not mean it must be at the same job. You will need to show W-2’s and pay stubs to document your job history so make sure not to count under the table jobs that cannot be proved with a paper trail. Some banks require you to detail a longer job history.
Down Payment Percentage
The amount you are willing to put down as the initial investment for your new manufactured or modular home plays a critical role in your bank application. Even the most challenged credit can get approved for a loan with a large enough down payment. In most cases, the minimum allowed by a bank will be 5% and can go as high as 40% depending on the factors above.
- Conventional loan
USModular, Inc. works with lenders that understand and appreciate the time savings and quality of a systems-built, modular or manufactured project and are accustomed to a fast turnaround schedule to get your project completed on time!