How does a mobile home effect lending?

Question

Hello. I am looking at a property in North Florida for purchase. It has a guest house on the property. One home was built in 2014 and it is a stick built home, the other one is a mobile home from the 70s.

My agent says they can only except cash offers due to the year the modular/mobile home is built. I suggested we remove the value of the mobile home from the loan and qualify based off the land and stick built home, but he told me in order for the bank to finance the deal the mobile home would need to be removed from the property.

Can anyone help add some clarity as to why this is? I want to purchase this home with the mobile home, but it sounds like if I want to finance it that is not possible.

Rachel H. · Answer

@Michael Rendon Regarding financing, it's always dependent on the lender. You may want to talk to small banks and/or credit unions to see what other options are available.

Also, you can try bringing in a partner or looking for a private lender for the deal. Another option is to buy with hard money and refinance sometime in the future.

Just some thoughts. Hope that helps!

Craig Janet · Answer

Very difficult to get a loan on a mobile home that isn't going to be owner occupied. You may have to look at other options like home equity loan or LOC.

Good Luck.

Erik Estrada · Answer

Are you buying the land and the mobile home?

You may be able to find a lender but it is very a niche product.

Stacy Raskin · Answer

@Michael Rendon, to qualify for most conventional financing, the mobile home would have to have been built after June 15, 1976. I ran into the same problem with a client. If it's built after you can obtain financing but it will affect pricing and the rate will be higher due to it being a mobile home.

Adrian Smude · Answer

Where are you with things?

Here’s some things from my opinion as a full time mobile home investor and educator. The fact you got so much info that’s confusion is a reason I love investing in Mobile homes because so many investors don’t understand them which leaves us with less competition. As mentioned June 15, 1976 is the magic year for banks to finance mobile homes. private money one fantastic way to finance properties like this. I’d also offer the seller what they are asking but on payments. They may say no today, but as time goes on they might change their mind. I always like to sit down and talk about this before offering.

I’ve also seen people get a bank loan for properties like this and have to have the mobile home removed within 90 days.

Be careful with removing the mobile home because the municipality might not let you replace it and the income stream will be missed.

Keep us updated with how it goes!

Caroline Gerardo · Answer

"mobile home" before 1976 has no real estate value in a residential appraisal. On the 1004 form it may have a negative value as it is tied in to sewer or septic without permits and are there other separate meters? I assume there is no permit for it to be on the land. Ask if there is a 433A which means they got a permit and the foundation was inspected.   There ae lenders who will loan on it BUT you need more cash down to overcome that the appraisal will come in lower than what you think. Anything not to code will need to be "fixed."

Adam Bartomeo · Answer

Mobile homes are considered an automobile in most states. Like an automobile, and opposite of real estate, they depreciate in value over time. Most lender have strict criteria about lending on mobile homes and the age is a significant criteria. Its been a while since I worked with mobile homes but it is probably close to 1990.

Michael Rendon · Answer

@Erik Estrada right now I am exploring options still early, but the goal would be to acquire the land with the mobile home, and the stick built home. I am relatively new to real estate with only a few deals, and I have never considered a property with a mobile home so it was news to me that this will effect lending abilities. At the moment the only option I am seeing feasible (without paying all cash) would be to have the seller parcel off the mobile home, and make that a cash deal while financing the rest.

Michael Rendon · Answer

Hey Darnell, we are not hiding anything, I am looking for more clarity from professionals on this topic. For example I have spoken with a lender today that said they cannot lend on a mobile home pre 1973, which has already given me more clarity. In no way is there any intent to commit fraud, just seeking information about lending and mobile homes.

How does a mobile home effect lending?

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