Financing Manufactured Homes

Are you looking to purchase a manufactured home, or do you currently own a manufactured home and are looking to refinance? If so, then you've likely had some trouble getting financing. If you're wondering why you're experiencing issues with the process of buying or refinancing one of these types of homes, then here are some reasons why.

High Likelihood of Default

The trouble with manufactured homes is that while most entities such as FHA, Fannie Mae and Freddie Mac will insure and fund a loan for these particular homes, most lenders will not finance them. This is largely due to the fact that, statistically, manufactured home loans are three times more likely to fall into a default status compared to other loans.

Lenders Can Be Penalized

You may have a great credit score with flawless payment history and still have trouble finding financing due to the fact that if and when these loans default, the aforementioned entities will hold the lender liable for the premiums. Additionally, if a lender funds too many loans that default, programs like FHA may kick the lender out completely; thereby removing the lenders ability to offer that program in the future.

Too Risky for Most Lenders

The Federal Housing Administration is losing a lot of money in the current housing market and is trying to remedy that by forcing lenders to pay back losses. They can do this because FHA and USDA are funded by the government. However, for the lender, this creates a situation where the risk is often too great to justify funding a loan, especially when they are three times more likely to default.

RP Funding Can Help

The good news is that it is not impossible to find financing for manufactured homes. As always, RP Funding encourages you to shop around and even give us a call to learn more about these types of loans and where you can receive help.