If you’re the owner of a manufactured home and you’re wondering about your eligibility for a reverse mortgage, here’s the short answer: you may be eligible. Now for the longer answer.
As with any prospective borrower, you must be 62 or older, legally own the home, be your primary residence, and be eligible for participation in Federal Housing Administration programs.
And if you have a manufactured home, yes, you can get a reverse mortgage—as long as it was built after June 15th, 1976. Why is this particular date so important? It was when the Department of Housing and Urban Development (HUD) started regulating the construction of manufactured homes under established guidelines. (Homes from before this date will not qualify for FHA-insured loans)
In 2009, manufactured units in condominium projects became eligible for FHA-insured reverse mortgages as long as they (as with all other manufactured homes) meet HUD guidelines.
Reverse Mortgage Manufactured Home Requirements
- The home’s floor area must be no less than 400 square feet (in 2010, the average size was 1,515 square feet).
- The structure must be built and remain on a permanent chassis, and it must be connected to the foundation through welds, bolts, and various light-gage metal plates.
- The home must have a seal that shows it has been constructed in conformance with Federal Manufactured Home Construction and Safety Standards. If your home was constructed after June 15th, 1976, it will have this seal.
- The finished grade elevation beneath the manufactured home or, if a basement is used, the lowest finished exterior grade adjacent to the perimeter enclosure shall be at or above the 100-year return frequency flood elevation.
- The home must be classified and taxed as “real estate” and cannot have been installed or occupied previously at any other site or location.
*Manufactured homes are often called “mobile homes”; however, a truly mobile home where you do not own the land and are not taxed as real estate is not eligible for any FHA reverse mortgage loan.
What This Could Mean for You
Finding a reverse mortgage lender might be difficult even if your manufactured home was built after June 15th, 1976. Some require a minimum appraised property value, and in other instances, origination fees may run a little higher than for other types of dwellings because of an extra foundation inspection required by an engineering company to ensure it complies with HUD’s acceptable foundation requirements.
Another issue could be the value of the land your home is located on. Manufactured homes on large acreage can be difficult to get approved since the value of the land could account for more of the appraised property value than the house itself. These sorts of cases can be tricky for loan underwriters.
Characteristics of Manufactured Homes
In 2010, there were 50,000 new manufactured homes placed in the United States, according to U.S. Census data, with the majority located outside of manufactured home communities. The South, by far, leads all other regions in the number of manufactured homes, with 34,000.
According to Census data, the average sales price of a manufactured home (single- and double-wide) in 2010 was $62,800, the lowest since 2007, when prices peaked at $65,400. The Western region led sales prices with an average of $79,100.
HUD has very specific guidelines for Manufactured homes, and very few lenders will still do them, but they can be done.
- Minimum Square Footage of 400 Square Feet* (current lender requirements are greater)
- The Property must be constructed after 1976 and meet HUD guidelines certified by HUD Label 24 CFR 3280.11.
- Must be classified and taxed as real estate (must have turned in DMV registrations to favor real property).
- Was built on and remains on a permanent chassis.
- Was designed to be used with a dwelling with a permanent foundation built to FHA criteria.
- Finished grade elevation beneath the home or if a basement is used, the basement floor must be at or above the 100-year frequency flood elevation (however, lenders will no longer accept a manufactured home in a flood hazard area).
- Must be situated on a permanent foundation
- Requires an engineer’s certification on the foundation
- borrowers must own the land
Additional Lender requirements/guidelines:
- The comparable sales for the appraisal must be available within 1 mile in urban and suburban areas and 20 miles in rural areas.
- The sales cannot require excessive adjustments, or the property will not be acceptable.
- All Sections of the Home must have HUD tags accessible to the appraiser.
- The appraiser must indicate that the home’s seal has not been compromised and that any structural modifications or additions pose no issues.
- All credit reports must be verified as having no personal liens pertaining to the dwelling.
- No single wide units.
- No units are located in a manufactured condominium complex.
- Units must be on their original site. Homes moved from other previously installed sites are ineligible.
Quick Manufactured Home Checklist
- Ensure that all property values are well-supported and that the property is readily marketable.
- All HUD Cert Labels/HUD Data Plates are indicated. All sections of the manufactured home must have affixed HUD cert labels located on the outside of the house. Appraisers must list the manufactured unit’s label in one of the Comment sections on the appraisal report. HUD Data Plate Compliance Cert is typically found inside a cabinet in the home. If HUD labels and data plates are not ATTACHED to the exterior or interior of the home, and pictures are not provided, we require an IBTS label verification letter or data plate/performance certificate form—order tags verifications at https://lvr-requests.ibts.org/#/LandingPage.
- Structural modifications or additions. If the appraiser notes additions or alterations to the manufactured housing unit, the Lender must ensure the addition was addressed in the foundation certification.
- General Guidelines Met: Appraiser or Structural Engineer must verify that the Manufactured home meets the revised guidelines outlined in the 4000.1.
Structural Engineer’s Report
- Engineer’s Certification Report:
- A certification attesting to compliance with the Permanent Foundations Guide for Manufactured Housing, dated September 1996, must be obtained from a licensed professional engineer. This certification must be within 6 months of loan closing and indicate the engineer’s seal.
- Structural modifications or additions: The certification must indicate that structural changes or additions to the property were made following HUD Manufactured Home Construction and Safety Standards.
- Lien(s) against Manufactured Home: The credit report should be carefully reviewed to determine if existing liens against the manufactured home are separate from any liens against the land.
- Title Purged and Taxed as Real Property: The manufactured home must be taxed as real property, and the file must contain evidence that the original title to the home was purged. The title must also provide the applicable endorsement on the final policy (CLTA 116.5, ALTA 7, FL 7, TX T‐31).
Ineligible Manufactured Homes
- Year built before June 15, 1976: Homes built before June 15, 1976 are ineligible.
- Moved from the original site: Homes previously installed or occupied at any other site are ineligible. The home must have never been moved from the original site other than from the dealership to the property location.
- Flood Zones: Manufactured homes in a Flood Zone or partially within a Flood Zone are ineligible.
- Home is on a land lease or leasehold: Manufactured homes on leased land that the borrower does not own are ineligible.
- Home is in a flood zone below the base flood elevation: Homes located in a flood zone AND below the base flood elevation are ineligible.
New Construction Manufactured Housing (Delivered Within Past 12 Months)
New Construction Manufactured homes are subject to the following additional guidelines:
- Certificate of Occupancy or equivalent
Manufactured Home FAQs
Can you get a reverse mortgage on a manufactured home?
What’s the difference of a manufactured and a mobile home?
Does my manufactured home require HUD tags?
Can I get a reverse mortgage on a single wide manufactured home?
Can you purchase a manufactured home using the reverse mortgage?
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