Refinancing with a Manufactured Home troubles

[Doug Burton]

A year ago my wife and I bought a property in Long Beach Washington. It had an existing 1994 single wide and a large shop plus some land zoned to add another house or two. The goal was to renovate and rent out the MH and convert the shop into a SFH and refinance it - since it was bought and renovated with cash or a HELOC from our main home.

A few snags developed - the shop needed extensive work so instead we had to tear it down and built new AND we had some red tape to convert from septic to city sewer. But the MH is now rented and the SFH is now a warm shell and we are now down to finish work - probably two months away from completion.

A few weeks ago we contacted our loan officer with questions and to give him more details (he's knew about the plan in general terms since before we bought it) since the finish work (+/- $50k) was planned to be financed with a Hard Money loan and we wanted to make sure our timing was as accurate as possible.

Well last night, as you can guess by the post title, our loan officer came back with major issues; saying that "Fannie Mae and Freddie Mac will not loan on a property if it has a MH" - even if the primary home is a regular stick built.  He asked around and couldn't find anybody that would refinance with a MH on the property.

I see in the forums that others have had similar issues but I haven't seen any resolution to the problem.  We will be contacting local banks/credit unions, etc - but does anyone have any specifics that worked for them?  Or are there other creative ways to deal with this?  We are open to most any option and appreciate any and all feedback.