Help for Bad Credit
Finding Bad Credit Mobile Home Financing
Mobile homes aren't as mobile as they once were and bad credit mobile home financing isn't as difficult to get as it once was either. Since 1976, new mobile homes have been built to meet the Federal Manufactured Home Construction and Safety Standards. They're now called manufactured homes and because of their better design and construction there's now a wider range of financing available.
With manufactured homes representing about 25% of all new homes sold, lenders have become more aggressive in financing them. Originally mobile homes were often moved and the only financing made on them were personal loan. These loans were shorter than mortgages and had higher interest rates. And because the loans weren't mortgages, the interest paid wasn't tax deductible. But with the improved standards and lack of mobility of manufactured housing, regular mortgages can now be obtained.
Having achieved similar status to a site-built home, manufactured homes can be financed with as little as 5% down and the balance due over 20 to 30 years. And if the home is permanently fixed to the owner's land, the loan interest is usually tax deductible.
Bad Credit Mobile Home Lenders
In addition to local lenders, big banks like Chase Manhattan and Citibank are active in making loans. FHA and VA also have lending programs for manufactured housing(see mobile home loans with bad credit).
Although manufactured houses can have nearly the same lending standing as site-built houses, interest rates on loans are still generally higher. New manufactured homes are made better, but they still don't last as long as a traditionally built home. This lowers the value of the home backing the loan so to make up for this, a higher rate is charged. Also many manufactured homes are still seen as personal property and only high-interest-rate personal loans can be made.
An additional problem facing people owning manufactured homes, is the slow pace for change with which state and local governments and lenders. Some states still see the homes as "mobile" and charge a vehicle fee. And since lenders were slow to start making manufactured home mortgage loans, some 65% of these loans are made by only ten lenders. This relative scarcity of lending choices leads to higher interest rates due to a lack of competition.
To combat the bias that still sees manufactured housing as mobile homes, you should own the land and have the home permanently fixed to the property. And locate in an area of rising housing prices. The more closely your manufactured home looks like a site-built home the easier you can get bad credit mobile home financing.