How to finance a 1972 manufactured home

Question

I was wondering if anybody had any ideas on where to get financing  on a manufactured house thatwas built in 1972. Anything pre 1976 seems to be really difficult in getting a loan on due to the fact that he did not start approving manufactured homes until 1976. There is an acre of land associated with the property but the fact that there is a house on it makes it really difficult to get financing. Any ideas? Thanks in advance!

Bill Hamilton · Answer

A pre 1976 manufactured home has a negative value. Have it hauled off and do any financing based off the value of the land. If that doesn't work, then the deal is not worthwhile. Treat the "home" same way you would a house that needed to be scraped due to structural failure.

Account Closed · Answer

@Daina Wilburn

I'd reach out to the owner for seller financing.  Worth a shot.

Grigory Pekarsky · Answer

First, we should classify the home as a "manufactured housing unit" instead of a house. Manufactured homes can be financed and don't require title and/or land transfer, so it is possible to sell without doing those. However, depending on the seller's situation this might not be an option. If that's the case, then there are two other options: 1) do a cash deal 2) borrow down payment money from family member or friend through their 401k program (you would pay them back over time just like renting - often at low interest rates). Note that you will need state-mandated insurance for your manufactured home if you go with option one or two.

Tim Winter · Answer

Run don't walk away. As others have said, pre Jun 15, 1976 mobiles are considered death traps. HUD won't insure them, so they're considerably less value than post '76 mobiles, even if they've been modified to be safe again, and most other financing mortgage insurance firms follow suit, so if they can't sell the loan to the secondary market you have to get a lender to do it on their own (portfolio loan) or private investor.

But why won't they insure them? Because manufactured housing was prone to safety problems like electrical and wiring issues that caused home fires. Fireengineering.com states that “In mobile homes built before 1976, heating and cooking equipment are in close proximity to sleeping areas. This poses dangers to occupants and firefighters. The closer the source of the fire is to the sleeping area, the shorter the time the searching firefighter has to effect a rescue. Site-built homes have numerous areas in which to place utilities, and they usually don’t close the only escape route for occupants, as happens many times in mobile homes.”

In addition, pre-1976 mobile homes had less insulation in walls, ceilings and floors, uninsulated air ducts and no vapor barriers in their roof cavities, making them an increased risk of fire hazards. Most include windows that are too small for the average-size person to escape from and wood paneling situated too close to the furnace. Moreover, others have aluminum wiring, which can cause sparking inside the walls.

But wait, it gets better.  In many jurisdictions, pre-1976 units may not be relocated or resold, so your asset may get little or nothing in trade other than scrap value.I would double, and probably triple check that your landlord policy would cover any issues with a pre-76 mobile. If not, then you have a product that you know is unsafe, placing residents in it for profit, and then when someone gets hurt and a prospecting attorney lets the victims know they can sue, case goes to court, what are you going to tell the judge? There's many ways to make money that don't have so much risk for the pay off, IMHO.

Good hunting out there.

Jeff Mars · Answer

In a very similar situation. The home is dated but, in great condition, good enough condition to rent, has had multiple additions added and a nice detached workshop and 3 bay garage. I can't find financing for land only. My lender is saying that it can only be land financing if there are not utilities and developed a lot in place. I've asked about seller financing but my agent said they're not interested. They're asking 129K... The land with garage only is worth $85K in my analysis. Any ideas?

Daina Wilburn · Answer

Well, I can't really bring much to the table. I just wanted to comment on some people here calling them/it junk. Earlier this year I was looking for a home and I found this 2/1 double wide on a beautiful corner lot in a small town with mature landscaping, two outbuildings and a two car garage with shop. The house itself was very nice. I'd been looking in this price range and that led me to see a lot of manufactured homes in WA state. I almost missed it - I knew about the June 15, 1976 thing and this was 1975. I called my mortgage guy and sure enough not financeable. I finally verified that with the listing agent. She originally had said one of the terms was conventional. She changed it to only cash out. It's really a shame. I don't have $185,000 in cash. I looked at a half dozen other manufactured homes that day and have since seen many others that were built after 1976. Most of them were truly trash. Some were maybe a little nicer because they had extensively updated, but of all the houses I've looked at near my price range over the last 3 months, this is by far the nicest total property I've seen. Just a pity. The seller will have to wait for a cash buyer.

Megan Arzt · Answer

However, that home could bring in $1200-1500 monthly.  Plus I could rent out the horse corrals, and build a mother-in-law apartment of up to 1000 sq ft.  Then I could scrap the place and rebuild it later.

Chris Mason · Answer

You line someone up that will remove that garbage from your future property for a fee, and look at land-based financing.

Charlie Fitzgerald · Answer

Consumer loan centers...Like the old Aames Home Loans, Beneficial Finance, etc.  A personal loan...not mortgage.

Megan Arzt · Answer

HUD, not he....

How to finance a 1972 manufactured home

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