Q: My husband and I are first-time home buyers. With housing prices so high these days, we are looking at manufactured homes. They seem too good to be true as far as price is concerned. How does the quality of manufactured homes compare to the quality of regular homes? How does the resale value of these homes stack up against normal homes? How hard is it to get a mortgage on a manufactured home? I am a veteran and I have yet to use my VA benefit. Can I get a VA loan on a manufactured home?
A: Manufactured homes have become increasingly popular because they are much less expensive than traditional “stick built” homes. That’s because standardized designs and the efficiencies of factory assembly line production drastically reduce construction costs.
The quality of today’s manufactured homes is quite good. Factory construction allows for more consistent quality control than is possible with work crews coming and going on a building site. And the fact that manufactured homes must be built to withstand the stress of transportation on highways means that in some ways they are actually sturdier than traditional site-built homes.
But don’t assume that just because the home arrives on the site almost completely assembled that there are no potential problems. You should hire a professional home inspector to check out the installation of a manufactured home, just as you would have a site-built home inspected before closing on the purchase. Proper siting of a manufactured home is very important. Make sure there is no earth-to-wood contact, and be sure there is an adequate surface water drainage system to keep water from accumulating under or around the house.
Also, while the overall construction quality of today’s manufactured homes is very good, there are some variations from manufacturer to manufacturer. The best way to judge the quality of these homes is to do a lot of comparison shopping. The more homes you look at, the more you will learn about the quality of construction and finish materials. Many manufactured homes now use the same high-quality components and fixtures that are found in site-built homes.
As to your question about the resale value of manufactured homes, I have seen studies by the Washington Manufactured Housing Association claiming that manufactured homes appreciate as fast, or nearly as fast, as comparable site-built homes in the same neighborhood. That’s because most modern manufactured homes are almost indistinguishable from traditional houses. They are nothing like the old aluminum-sided “trailer park” homes of years gone by. That type of “mobile home” does depreciate in value because they are considered “personal property,” like a car, rather than real estate.
However, despite the studies, the reality is that many home buyers still have a negative perception of manufactured homes as “mobile homes,” and any time you reduce the number of potential buyers you are bound to impact the resale value of a property. All things being equal, most home buyers would prefer to purchase a “stick-built” house, so to be honest, I’d have to say that it is a little more difficult to sell a manufactured home. But I wouldn’t necessarily let that discourage you from buying one. It depends on where you plan to live. Manufactured homes are far more common in rural areas than suburban areas, so they are more generally accepted and there is less “discrimination” against them.
Conventional mortgage financing on new manufactured homes is relatively easy to obtain, but financing can be a little more difficult for older manufactured homes. Typical lender requirements for manufactured homes include: 1) Must be built after 1976 in compliance with HUD standards. 2) Permanently attached to the lot on a foundation. 3) Double-wide or larger. 4) Traditional house siding and roofing materials, rather than metal roofs and aluminum siding or skirting. 5) Land value cannot make up more than 50 percent of the total value of the home. VA loans are somewhat easier to easier to obtain on manufactured homes than conventional homes, so you should have no problem getting a loan if you find one you like.
– by Steve Tytler, “The Mortgage Guru.”
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