Financing

Factory-built homes are one of the most affordable types of housing -- generally priced at about half the cost of new site-built homes. The purchase price, however, is not the only factor to consider in determining if you can afford a factory-built home. You must also consider the added cost of purchasing private land or leasing land if you place or buy your home in a land-leased manufactured home community.

You also need to consider:
the down payment · interest rates · length of loan term · loan qualification requirements

Two types of loans are available for the factory-built homebuyer. They are:

Personal property loan ("chattel" loan): A factory-built home purchased separately from its lot is financed as personal property. These loans, similar to those made on cars, boats and other major purchases, are a popular way to finance factory-built homes in communities or on rented or leased property. 1. Requires a 10 percent minimum down payment and is financed, on average, from 15 to 30 years. 2. Interest rates are usually 2 to 3 percentage points higher than those for real property loans, and can either be fixed or variable. 3. It is generally easier to get approval for this type of loan because it allows for a higher debt-to-income ratio. 4. It can cover both the cost of your home and lot improvements such as walkways, porches, carports and garages-especially if the community where you place your home requires such add-ons.

Real property loan: A factory-built home purchased as a package with land may be considered real property and may be financed with the same kind of long-term mortgage as a site-built house. These loans are available only for permanently located homes. 1. Requires a 5- to10-percent down payment, and is financed with a fixed-rate or adjustable mortgage over a 15 to 30-year period. 2. Interest rates are generally 2 to 3 percentage points lower than for personal property loans. 3. Loan requirements are often comparable to those for a site-built home loan. This means they are generally harder to obtain than a personal property loan. 4. The loan usually covers both the cost of your home and lot improvements if the whole package (house plus lot improvements) "appraises out" at the selling price.

Showcase Homes can assist you in deciding which type of financing is right for you based on your personal qualifications. We can also help you to find a source of financing. Please call us to discuss your specific requirements. You may also want to check out our online mortgage calculator.