You find your dream ranch styled home, obtain financing, make an offer, and then the appraisal comes back saying the home is a double wide?! How did no one say anything! We’ve seen this scenario where a deal is progressing and then the bank pulls back because they will not lend on a “manufactured home.” In some situations, they can be hard to spot, but it can mean the difference between being able to purchase a home or not. So today we want to equip you with some tools for the field on how to spot a manufactured home, and what issues may need to be overcome.
First lets clear up some terminology:
Manufactured Home - refers to a home that is constructed to meet HUD guidelines, built off site, delivered to the property in portions and then connected. “Single-wides” and “Double-wides” and “Triple-wides” are manufactured homes.
Modular Home - refers to a home that is constructed to meet building code and it is also built off site and delivered to the property in portions and then connected.
The real difference is the quality of the craftsmanship and the minimum requirements of construction. Manufactured homes are built to HUD standards and modular homes are built to IBC (International Building Code) standards.
Here are a few easy steps to determine if the property is a manufactured home:
Order the county record. Most counties will note if the structure is a manufactured home and in some cases regardless of how many sections, call it a trailer.
Look for the HUD Tag located on the corners of the home
Look for the HUD data plate or certification, which is a piece of paper glued to some surface of the home (under the kitchen sink, in a closet and near the electrical panel are most common)
Look at the bottom of the structure. If you see a steal under carriage this is a sure sign (but some manufactured homes have wood under carriages) then this is a manufactured home not a modular.
Why is this important:
Manufactured homes built prior to June 30, 1976 can not obtain typical financing. This makes finding the HUD Tag and Data Plate very important. We’ve recently seen a manufactured home built in 1970 sell with conventional financing in the MLS - sadly this person (and the appraiser who signed off on it) will be in for a rude awakening when they attempt to sell.
Manufactured homes have a very different marketability than modular or other stick built construction. This is represented in the fact that FNMA requires these to be performed on a different forms with different analysis.
Remember, once a manufactured home, always a manufactured home- no matter the modifications. We’ve run across manufactured homes with extensive additions and/or remodeling rendering them very similar to a typical stick built structure. However, for lending purposes, it will always be treated as if it is a manufactured home, no matter the modifications.
Some common questions:
What if my home sits on a permanent foundation and/or was recently converted to real estate?
Once a manufactured home, always a manufactured home. That’s the answer, basically. Converting your home to ‘real estate’, or placing your manufactured home on a concrete block foundation, for instance, will not change the fact that it is manufactured. It will still be appraised the same way and will have the same marketability as before.
But what if I changed/updated/upgraded almost everything?
If any part of the original manufactured home remains, FNMA requires that the property be analyzed as a manufactured home.
But it doesn’t even look like one anymore?!
My manufactured home has vinyl skirting. Will it qualify for FHA financing?
Not without backing. FHA states that “if the perimeter enclosure is non-load bearing skirting comprised of lightweight material, there must be adequate backing (such as: concrete, masonry, or treated wood) to permanently attach and support or reinforce the skirting” This means that your vinyl skirting will need to be reinforced with backing. It’s been our experience that treated wood is the cheapest and quickest fix.
I can’t find my HUD Data Plate / Compliance Certificate in my house. Is that going to be a problem when I sell? It depends. Don’t you love that answer? It really comes down to the lender. When needed, your lender will be able to guide you through this process. But to get you started, you can check out this helpful link by HUD: https://www.hud.gov/program_offices/housing/rmra/mhs/mhslabels
Whether you’re buying or selling, knowing the difference between a manufactured and modular home could mean the difference between making and breaking the sale. Make sure you advertise your home for sale correctly and make sure if you are a buyer that you do your homework to make sure the home is what the seller says it is.