Can You Secure a Reverse Mortgage for Your Manufactured Home?

Have you ever thought about using your manufactured home to get some extra retirement funds through a reverse mortgage? Well, you totally can! Turns out, reverse mortgages aren't just for regular site-built houses.

Yes, you heard it right! It's all about meeting the HUD/FHA standards, and you're set. So, if you're curious about how to make this happen, stick around because this article's got all the details you need to know.

What Is a Manufactured Home?

Manufactured homes are constructed off-site in a factory setting part by part based on the building codes set by the U.S. Department of Housing and Urban Development (HUD).

Once built, they’re then transported to the homeowner's location. These homes come in various shapes, sizes, and styles, offering a more affordable housing option for many individuals and families. Most of today’s manufactured homes fall into categories like:

• ➙ Single-wide:

  These homes are built in a single section, offering a simple and compact layout.

• ➙ Double-wide:

  As the name implies, these homes consist of two sections joined together, providing more room inside.

• ➙ Triple-wide:

  Now, think about three of those single-wide houses connected together. That's triple-wide! It's even bigger than a double-wide, so you have tons of space to spread out and make yourself at home.

Understanding Reverse Mortgages: How They Work & Who's Eligible

Reverse mortgages for seniors help convert a portion of their home equity into cash, which can be received as a lump sum, monthly payments, or a line of credit. The most common type of reverse mortgage is an HECM, which stands for Home Equity Conversion Mortgage.

Unlike traditional mortgages, there are no monthly payments required. Instead, the loan balance is repaid when the homeowner sells the home, moves out, or passes away.

So, who's eligible for a reverse mortgage? It’s mostly available for homeowners who are aged 62 and above, and sometimes for homeowners aged 55 who want to go for a jumbo reverse mortgage, another type offered for homes that are usually worth more than regular houses.

HUD/FHA Reverse Mortgage Guidelines for Manufactured Homes

Now, let me answer the real question here - can you get a reverse mortgage on a manufactured home? Yes, it's doable, as long as you meet the rules laid out by the United States Department of Housing and Urban Development (HUD) and the Federal Housing Administration (FHA).

• Permanent foundation

  The home must be affixed to a permanent foundation that meets HUD standards for stability and this requires an engineer’s certification.

• Age of the home

  Manufactured homes must have been constructed after June 15, 1976, in compliance with HUD's Manufactured Home Construction and Safety Standards.

• HUD certification

  The home must be certified as meeting HUD standards, which can be verified through a HUD seal affixed to the exterior of the home.

• Classification as Real Estate

  The property needs to be officially recognized and taxed as real estate, indicating it's considered a permanent structure rather than a movable object like a vehicle.

• Elevation and Flood Hazard

  The home must have a finished grade elevation beneath it, or if there's a basement, its floor must be at or above the 100-year flood elevation.

• Land Ownership

  Borrowers must own the land on which the manufactured home is located.

• Square Footage Requirement

  The home must have minimum square footage, usually greater than 400 square feet and at least 12 feet wide according to current lender requirements.

• Credit Report Verification

  When you apply for a loan, the lender checks your credit report to ensure there are no debts or legal claims on the house you want to buy that could cause issues later.

• Comparable Sales for Appraisal

  The appraiser looks at similar homes recently sold nearby to estimate their value. These sales should be close by, within 1 mile in towns and cities, or 20 miles in rural areas. The sales prices should be similar to the house being appraised.

• Unit Specifications

  No single-wide units are accepted, and units located in manufactured condominium complexes are not eligible. Units must be on their original site and the homes moved from other previously installed sites are ineligible.

How to Prepare Your Manufactured Home for HECM Approval

To increase your chances of securing approval for the best reverse mortgage terms, you need to take proactive steps to ensure your manufactured home meets the necessary criteria and standards expected by lenders.

• Ensure your home meets HUD/FHA guidelines by verifying its construction date, permanent foundation, and compliance with safety standards.

• Complete any necessary repairs or maintenance to enhance the home's condition and appeal to lenders.

• Gather all required documentation, including proof of homeownership and land ownership, to streamline the approval process.

• Consider obtaining an engineer's certification for the foundation to satisfy lender requirements.

• Attend mandatory counseling sessions to gain a thorough understanding of home loans for seniors and the associated responsibilities.

The Reverse Mortgage Application Process

Here's a sneak peek into how your application will look when you click on that "apply" button at KreditSanta!

Please note that the process below is to give you an idea of what goes behind your application, it might differ based on your individual circumstances & financial needs.

• ➙ We start by understanding your financial goals and how a reverse mortgage fits into your plans.

• ➙ You'll attend a mandatory counseling session with a HUD-Approved Counselor to confirm eligibility.

• ➙ We arrange a professional appraisal to assess your property's compliance with safety and HUD standards.

• ➙ Upon approval, we swiftly proceed with creating and funding your reverse mortgage.

A Quick Recap of Key Points

In short, you can definitely get a reverse mortgage for your manufactured home, thanks to specific guidelines from HUD/FHA.

Just make sure you understand the rules, get your home ready, and work with an expert reverse mortgage loan officer. This way, you can use your manufactured home's equity to improve your retirement without worries.