Mobile homes, also known as manufactured homes, can be a great affordable housing option for many folks in Michigan. With the right lender and loan program, financing a mobile home purchase can be straightforward. However, there are some key factors to consider when applying for a mobile home loan in the Great Lake State.
In this comprehensive guide, we’ll cover everything you need to know about getting approved for mobile home financing in Michigan including
- Types of mobile home loans
- Loan requirements
- Interest rates and fees
- Top lenders
- The application process
- Tips for approval
An Overview of Mobile Home Loans in Michigan
A manufactured home loan is a mortgage specially designed for financing a mobile or manufactured home, These loans have some unique requirements compared to regular site-built home mortgages
There are a few main types of mobile home loans available in Michigan:
- FHA Title I loans
- FHA 203(k) loans
- Conventional loans
- USDA loans
- VA loans
- Personal property loans
Most lenders require your mobile home to be attached to a permanent foundation on land that you own. Loans for homes still on wheels or in mobile home parks are harder to come by.
Mobile home loans typically require lower credit scores and down payments than site-built mortgages. But interest rates may be a bit higher.
Below we’ll explore the most common mobile home loan programs in more detail.
FHA Title I Manufactured Home Loans
FHA Title I loans are government-backed mortgages designed specifically for manufactured housing. They are offered directly by approved lenders and insured by the Federal Housing Administration (FHA).
Here are some key details on FHA Title I mobile home loans in Michigan:
Down Payment: Just 3.5% down
Credit Score: 500+
Loan Amounts: Up to $69,678 for single-wide homes, more for multi-section homes
Interest Rates: Typically competitive fixed rates
Fees: Up to 2% upfront mortgage insurance premium
FHA Title I loans offer low down payments and flexible credit requirements. But the maximum loan amount is relatively low compared to other programs.
FHA 203(k) Rehab Loans
FHA 203(k) loans allow you to roll the purchase price and renovation costs of a home into a single mortgage. They can be used to finance the purchase and improvement of a manufactured home.
Down Payment: 3.5%
Credit Score: 500+
Loan Amounts: Up to $69,678 base plus up to $35,000 for renovations
Interest Rates: Competitive fixed rates
Fees: Up to 2% upfront mortgage insurance premium
203(k) loans offer an easy way for buyers to finance necessary updates or repairs to an older mobile home along with their purchase. Borrowers must use a 203(k) consultant to manage the rehab scope.
Conventional Manufactured Home Loans
Conventional mortgages are offered by private lenders like banks and credit unions without government backing. Here are some perks of conventional mobile home loans:
- Lower monthly mortgage insurance
- Higher loan amounts
- Easier condo financing
Down Payment: Typically 5-20%
Credit Score: 620+
Loan Amounts: Varies by lender, often up to $650,000
Interest Rates: Competitive fixed rates
Fees: Possible lender origination fee around 1% of loan amount
Conventional loans allow qualified buyers to secure mobile home financing with low down payments and no usage restrictions. But you’ll need a good credit score.
USDA Loans
USDA home loans are backed by the U.S. Department of Agriculture and aimed at low-income buyers in rural areas. They offer:
- 100% financing
- Low fixed interest rates
- Flexible credit requirements
Down Payment: 0%
Credit Score: Typically 640+
Loan Amounts: Up to $647,200 in Michigan
Interest Rates: Below market fixed rates
Fees: 1% upfront guarantee fee and annual fee around 0.35% of loan amount
USDA loans offer terrific low rates and require no down payment. But availability is limited based on home location and household income caps.
VA Loans
VA mortgages help eligible military members, veterans, and their families finance home purchases. Benefits include:
- 100% financing without down payment
- No monthly mortgage insurance
- Competitive fixed rates
Down Payment: 0%
Credit Score: Typically 620+
Loan Amounts: No max; based on entitlement
Interest Rates: Below market fixed rates
Fees: Up to 2% funding fee
VA mobile home loans help buyers with military ties purchase a manufactured home with no money down. But you’ll need a VA Certificate of Eligibility.
Personal Property Loans
Personal property loans can finance mobile homes that do not sit on a permanent foundation or owned land. They work more like auto loans, with the home as collateral.
- Higher interest rates
- Shorter repayment terms
- Stricter credit requirements
Lenders for mobile homes still on wheels or in parks may charge higher rates and fees. Loans max out around $100,000 for shorter terms of 5-15 years.
Mobile Home Loan Requirements in Michigan
While requirements vary by lender and loan type, there are some general guidelines for getting approved for mobile home financing in Michigan:
- Credit Score: At least 500 for government-backed loans; 600+ for conventional
- Down Payment: From 0-20%
- Debt-to-Income Ratio: Typically below 43%
- Home Requirements: Attached to owned land with permanent foundation
- Home Inspections: Must pass HUD inspection codes
- Title: Must hold title to both home and land
Meeting these minimum standards is key for securing affordable mobile home loan rates and terms. We’ll go over some tips for getting approved coming up.
Interest Rates and Fees
Mobile home loans typically have interest rates about 0.5 to 1% higher than site-built mortgages. Here are some average manufactured home loan rates in Michigan as of February 2023:
- FHA: Around 7% fixed
- Conventional: 6.5-7% fixed
- USDA: Around 5.5% fixed
- VA: Around 5.75% fixed
Government-backed loans like FHA, USDA, and VA may have upfront mortgage insurance premiums between 1-2% of the loan amount. Conventional loans often have lender origination fees around 1%.
Shopping around with multiple lenders can help you secure the most competitive rates and costs. Getting pre-approved early in the home shopping process may also score a lower rate.
Top Mobile Home Lenders in Michigan
There are a variety of banks, credit unions, and specialized lenders that offer manufactured home loans in Michigan. Here are a few top picks:
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Riverbank Finance: Offers FHA, conventional, and VA loans for mobile homes in Michigan. Fast online pre-approvals.
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Triad Financial Services: Provides nationwide mobile home financing including options for land-home packages.
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Lake Michigan Credit Union: Member-owned credit union offering competitive mobile home loan rates and terms.
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United Wholesale Mortgage: National lender with manufactured housing financing programs and a streamlined digital process.
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Stockton Mortgage: Local Michigan lender specializing in mobile and manufactured home loans.
Shopping rates from both local and national lenders can help buyers find the best rates and service.
How to Apply for a Mobile Home Loan in Michigan
Ready to move forward with financing your manufactured home purchase in Michigan? Here are some steps to take:
1. Check your credit and finances. Knowing your credit score and financial details will help you pick eligible loan programs when applying.
2. Choose a lender. Compare a few lenders’ rates, fees, and loan offerings. Apply with one that fits your scenario.
3. Complete the application. You’ll provide financial, employment, and identity documents to verify your details.
4. Get pre-approved. The lender will analyze your information and issue a pre-approval letter if you qualify. This shows sellers you are a serious buyer.
5. Make an offer. Your agent can negotiate and draft an offer with your pre-approval letter attached.
6. Finalize loan details. Once your offer is accepted, you’ll lock in your rate and finalize paperwork for closing.
7. Close on your new home! Set a closing date once all conditions are cleared. Bring your down payment and sign documents to get the keys!
Getting pre-approved early in the process will make placing an offer much easier. Ask your lender what documents you’ll need to provide for swift processing.
Tips for Getting Approved for a
MANUFACTURED AND MODULAR HOME LOANS IN MICHIGAN
Once you find your manufactured home or modular home in Michigan, you have multiple financing options available to you. There are two common ways of financing. When you are financing the land as well as the home itself, you’re likely to use a conventional land or land construction loan. If you’re financing just the home itself, you’ll probably use a chattel loan. Check out the listings below to find a lender in Michigan that can help you find the right manufactured home loan.