Reverse Mortgages and Manufactured Homes
If you own a manufactured home (mobile home) and are wondering whether or not you can take out a reverse mortgage, there are a few things to consider. In this article we will cover what you need to determine if it works for you.
Let’s define what a prefab house is.
There is some confusion here between manufactured homes and modular homes. The easiest way to explain it is if your house comes with wheels and axles, usually in two halves, it’s a prefab. If it came on a flatbed truck and was erected on your site, it’s a modular home. Reverse work loans on both types of homes, but a modular home will have fewer requirements for it.
What year is your manufactured home?
FHA will only make loans for manufactured homes if they are newer than June 1976. If they are older, you will not find a loan that is federally insured, such as a reverse mortgage. There are HUD stickers on your home that will identify the year it was built.
Is it double wide or larger?
Reverse loans require the house to be larger than a single width. Even if yours is classified as super singlewide, a reverse mortgage will not work. Double or triple loans are needed to make the loan work for you.
Has your house moved twice (or more)?
If your home was placed on its original site and then purchased used and moved to its current site, it is not eligible for a reverse mortgage. The house must be placed on its original site and left there..
Are you in a flood zone?
If you are in a flood zone, you may not be eligible, depending on a few factors. If your home or property is in a flood zone, be sure to discuss this with your loan officer. The fact that you are in a flood zone does not disqualify you. More details are needed to make a determination.
Do you own the land?
Manufactured homes in a park can work, but you must own the land. If your home is on leased land, or in other words you pay rent, reverse mortgages probably aren’t the solution for you.
Owning a manufactured home can be an inexpensive way to get a home that’s a great place to retire. Just keep in mind that a few special considerations are necessary, and let your loan officer know you’re fabricated. Otherwise, it may cost you unnecessary money when you apply for the loan.