Using a HELOC on a manufactured home

[Troy Garrett]

I'm trying to get my first BRRRR going and I'm running into a wall. My plan was to use a HELOC in my current residence to get the ball rolling. Its a custom 3 piece manufactured home built in 2001 but it's not considered a modular home because it's attached to the steel frame it was built on. I'm finding that a manufactured home is pretty worthless in the eyes of the banks in regards to second mortgages or loans backed by it as collateral. We put $100k down so my assumption was that I had that equity in it at least if I were to sell it again. Our market has gone up considerably since we bought it two years ago so I have much more equity in it from when we bought it.

The issue I’m finding is that even though it’s on the piers, tied down, sitting on a block foundation with crawl space it’s still considered a mobile home because it’s built on a steel frame. The banks (both local credit unions and banks far and wide) are only seeing the home and not the land together. This property is real estate. The county has changed the deed to reflect the title for the home has been changed and the land and home are now one, not two separate taxable items. Apparently the banks only look at the value of the home and determined manufactured homes aren’t worth anything. They didn’t have a problem getting me a mortgage to purchase it to begin with but it’s apparently of no value after that 😀. 

With that being said, has anyone ever run into this issue and what have you done to get around this. I'm by no means giving up and I will get my first property by the end of the year one way or another but this wild be the best way to get a BRRRR started.

Thanks for all of your input.