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Manufactured homes, pre-fab homes, modular homes, self-build homes – there are many names with slightly different definitions for what are ultimately just homes. That means that buyers of these types of home still require mortgage financing.
Compared with building a fully customized new home, however, manufactured homes offer two key advantages: cost and time. The process of securing mortgage financing for these types of homes is not much different from the purchase of a traditional home.
Read on to learn what’s involved in securing mortgage financing for manufactured homes and special considerations mortgage brokers should keep in mind.
To keep things simple, we use the term ‘manufactured homes’ to refer to any home that is based on an existing design and constructed using building materials that are either preassembled or delivered to the building site as a kit.
This covers a variety of scenarios, including:
Manufactured homes are often cost effective as the companies that supply them are able to achieve significant economies of scale compared with custom building.
In addition, when a home is built – either partially or fully in a factory – there tends to be more certainty regarding timelines and less risk of weather delays.
Mortgages for manufactured homes generally resemble construction mortgages in that the disbursement of funds is staggered in line with the progress of building work.
At Pillar, we collaborate closely with the manufactured home supplier to ensure alignment between their payment schedule and our disbursement schedule, ensuring that funds are available for upfront deposits, progress payments and payment on delivery.
Rather than applying a one-size-fits-all approach, we remain flexible to meet the needs of individual clients and deals. For instance, if a client does not yet own the land where they plan to place their manufactured home, we can arrange one mortgage covering both the land and the new home or split these into two separate transactions.
The only type of manufactured homes that we do not finance are trailers and mobile homes.
As a broker, helping your client secure a mortgage for a manufactured home follows the same general process as a mortgage for other types of homes.
At Pillar, our mortgage requirements and terms are also similar. For example:
Necessary client documentation:
Pillar has the expertise to help you secure a flexible mortgage for your client’s purchase of a manufactured home. For questions or to discuss a prospective deal, contact our business development team today.