If you want to buy a HUD home, mobile home or manufactured home, you can find them for sale through the HUD government agency. You may also qualify for federal mortgage programs.
Manufactured homes, also known as mobile homes, offer an affordable means of housing in both rural and non-rural areas. The Department of Housing and Urban Development offers financing for the purchase and placement of a manufactured home onto a permanent foundation. The home and the lot to which the unit is affixed must meet the department's standards. The U.S. Department of Housing and Urban Development (HUD) has thousands forforeclosed homes for sale, in every state in the country. If you want to buy a HUD home, mobile homes and manufactured homes are available as well.
HUD has these homes for sale because they had FHA-backed mortgages, so when the homeowners defaulted on the loans, HUD paid the lender and took possession of the properties. You may get a home at a very low price if you buy a HUD home that’s a mobile or manufactured home. Manufactured and mobile homes are inexpensively made compared to stick-built home construction. A manufactured home or mobile home is made in a warehouse and then shipped to its set-up location. These homes mustmeet federal standardsfor safety and construction.
HUD oversees the Federal Housing Administration, which insures single-family residences, including qualified manufactured homes. Its Title I or Title II mortgage insurance programs cover manufactured homes. The Title I program offers lower loan amounts and shorter repayment terms than Title II loans. Through Title II loans, the manufactured home is treated much like a traditional, site-built home, but allows the borrower to cover the cost of transporting and affixing the manufactured house to a lot.
Manufactured homes taxed as real estate and secured by a mortgage or trust deed have a repayment term of 15 to 25 years under Title I. Through HUD, you can get a Title I loan to buy a new or existing manufactured home for an amount up to $69,678. This loan amount can be used to cover the cost of transporting the house to its permanent site and setting it up. You can also get a separate loan up to $23,226 to buy a manufactured home lot under Title I. To complete both at once, a combination loan is available with a maximum loan limit of $92,904.
You can finance the purchase of a newly constructed manufactured home and its installation with a Title II loan. This construction-to-permanent loan involves the purchase of both the home and the land in a single transaction. A Title II loan requires an escrow account from which the borrower draws the funds to pay a predetermined contractor's fees for setting up the home. The loan can also cover the costs of removing an existing home from its permanent foundation. Title II loans adhere to FHA's maximum loan limit for the particular area in which the site is located, which is $275,665 in most parts of the country. However, in certain high-cost areas, such as San Francisco and Alameda counties, the limit raises to $636,150. The maximum repayment term is 30 years.
Eligible manufactured homes meet the department's standards for durability, construction and safety, known as HUD Code. These homes were built after June 15, 1976. A red certification label, or HUD tag, is affixed to the exterior of qualified units. HUD homes built before this date cannot be modified to meet HUD Code. Homes built on or after the date, that undergo modifications, must pass re-inspection by a licensed engineer to ensure continued compliance with the code.
Whether you buy a HUD mobile home or buy a HUD manufactured home, you will need the assistance of an experienced real estate agent. AHUD-approvedreal estate agent is required to make a bid on the purchase of a HUD home. An agent who has dealt with HUD homes in the past will understand all of the language and qualifications involved in the purchase. In addition, he or she can help you find an FHA lender to finance the purchase.
The amount of money you will need to come up with up front varies depending on the cost of the property, the type of mortgage you get and your credit. Generally, when you place a bid on a HUD home, you will make an offer to show you are serious about the purchase. The money goes into an escrow account and if your offer is accepted, it will go towards your down payment. The more money you can come up with for a down payment, the less you will have to borrow.
Deposits for HUD homes are usually between $500 to $2,000, depending on the cost of the home. If the home requires a repair escrow, you may have to put down additional funds.
If you want to buy a HUD mobile home or buy a HUD manufactured home, it’s likely that you’ll find a good deal on the price. RealtyNow can help you find a lender who deals with HUD properties and a qualified real estate agent to guide you through the process. Enter a zip code above to get started.
To learn more aboutbuying foreclosed homes, this free guide helps you find those listings and buy distressed properties.