When purchasing a manufactured home, there are several key steps and requirements to be aware of to ensure a smooth transaction. Once you've determined that the home you're interested in is a manufactured home, or you’re under contract, the first thing you should do is inform your lender. There are specific requirements for manufactured homes that differ from those for stick-built homes, and your lender needs to be aware to provide the correct guidance.

Mortgage Requirements

The mortgage requirements for a manufactured home include both loan-specific and standard conditions. One crucial document for all mortgage loans is the Affidavit of Affixture (AOA). This document converts the home from personal property (green title) to real property. In Michigan, the green title must be sent to the state with the AOA application. The state will destroy the green title and issue the AOA, which must then be recorded with the county. Ensuring that all information regarding the home's manufacturer and serial number is accurate is vital. Incorrect information can lead to delays as corrections are made.

Structural Requirements

Regardless of the AOA status, an appraiser must confirm that the home's axles have been removed and that proper tie-downs are in place. If axles are still present, they must be removed before closing. Similarly, if tie-downs are absent, they need to be installed before the mortgage can close. These structural requirements are essential for the safety and stability of the manufactured home.

Foundation Inspections

Another critical factor is determining whether a foundation inspection is necessary. For conventional financing, a foundation inspection might be required if there have been any additions to the home, such as a porch, covered porch or deck, garage, steel roof, or any other extension. This inspection ensures that the additions are engineered correctly and do not place undue stress on the manufactured home.

For FHA home loans, a foundation inspection is mandatory for every purchase transaction of a manufactured home. This thorough inspection confirms the home's foundation meets specific standards, ensuring the safety and stability of the entire structure.

Additional Considerations

When buying a manufactured home in Michigan, be aware of any local regulations or requirements that may apply. These can include zoning laws, property tax implications, and homeowner association rules if applicable. Consulting with professionals who are experienced in manufactured home transactions can provide valuable insights and help navigate any complexities.

Conclusion

Purchasing a manufactured home involves specific steps and requirements that differ from buying a stick-built home. By informing your lender early, ensuring all documentation is accurate, and meeting structural and inspection requirements, you can facilitate a smoother buying process. Understanding these unique aspects of manufactured home purchases will help you make informed decisions and avoid potential delays or complications.

Down Payment Assistance Programs:

Using MSHDA’s Down Payment Assistance Program is available when then 1st is an FHA Loan. However, Conventional Loans buying a manufactured homy cannot us MSHDA’s down payment assistance program.

Further questions or personalized guidance, it's advisable to consult with your lender or a real estate professional experienced in manufactured home transactions in Michigan.

Purchasing or refinancing a manufactured home can be a practical and affordable option for many homebuyers. Whether you’re considering a single wide or double wide, understanding the available mortgage programs and their specific requirements is crucial. Here’s a detailed look at the options for buying or refinancing a manufactured home in Michigan.

Conventional Financing

For those opting for conventional financing, there are specific credit score and debt ratio requirements that must be met. Conventional loans typically require a higher credit score compared to government-backed loans. Additionally, the minimum down payment when buying a manufactured home using a conventional loan is 5% of the sales price.

A crucial requirement for conventional financing is the Affidavit of Affixture (AOA), which converts the manufactured home from personal property to real property. This involves sending the green title to the state of Michigan along with the AOA application. Once approved, the state will destroy the green title and issue the AOA, which must be filed with the county.

Furthermore, a foundation inspection may be required. This inspection ensures that the home’s foundation meets specific standards, particularly if there have been any additions to the home, such as a porch, deck, or garage. This inspection is vital to confirm that the structure is safe and stable.

FHA Financing

FHA financing offers more flexibility regarding credit and debt ratio options, making it a popular choice for many buyers. The minimum down payment requirement for FHA loans is 3.5%, regardless of whether the home is a manufactured home or a stick-built home. This lower down payment requirement makes FHA loans accessible to more buyers.

Like conventional loans, FHA financing requires an AOA. Additionally, a foundation inspection is mandatory for all FHA-financed manufactured homes. This inspection ensures that the home’s foundation is secure and meets FHA standards, which is essential for the safety and longevity of the property.

VA Financing

For eligible veterans, active-duty service members, and their families, VA financing is an excellent option due to its flexible credit and debt ratio requirements. The minimum down payment for VA loans is zero, meaning no down payment is required, whether the home is a manufactured home or a stick-built home.

An AOA is required for VA financing, and a foundation inspection may be necessary depending on the appraiser’s report. The appraiser will assess the property and determine if the foundation meets VA standards or if any additional inspections are required.

Rural Housing

It’s important to note that Rural Housing programs do not offer loans for manufactured homes. Buyers looking to finance a manufactured home will need to explore other options such as conventional, FHA, or VA financing.

Key Considerations

When considering buying or refinancing a manufactured home in Michigan, there are a few additional points to keep in mind:

Build Date: The home must have been built after June 15th, 1976. Homes built before this date do not meet the HUD standards and are not eligible for most mortgage programs.

Appraisal and Inspection: Besides the foundation inspection, an overall appraisal will be conducted to assess the home’s value and condition.

Tie-Downs and Axles: For all financing options, it’s essential that the manufactured home’s axles are removed and proper tie-downs are installed. These are required to ensure the home’s stability and safety.

Conclusion

Purchasing or refinancing a manufactured home in Michigan involves navigating specific requirements and choosing the right mortgage program. Whether you opt for conventional, FHA, or VA financing, understanding the nuances of each option will help you make an informed decision. Always ensure that your home meets the necessary standards and consult with your lender to facilitate a smooth and successful home buying or refinancing process.