Mobile Home Financing / Manufactured Home Loan

Mobile homes are an affordable alternative to on-site built homes. Also called manufactured homes, they are often found in rural areas and high-density development areas.

A mobile home is built in a factory and then delivered by tractor-trailer. Though they are called "mobile," most of these homes are designed to be placed in one location for the life of the structure. Mobile homes are often confused with the self-propelled vehicles called motor homes or RVs. A mobile home is not intended to be moved from site to site.
When placed on a permanent foundation, the home is only slightly different than a traditional home.

There are two main types of mobile homes: single-wides and double-wides. A single-wide is approximately 16 feet in width, while a double wide is usually over 24 feet in width. Most double-wides are split in half for delivery and then joined together on-site. There are also triple-wides and two-story mobile homes, but they are rare.

Mobile homes are regulated by the United States Department of Housing and Urban Development, under the Federal National Manufactured Housing Construction and Safety Standards Act of 1974. Because of their federal regulation, they aren't subject to the local building authorities. This is what allows many mobile home manufacturers to market to the entire country.

The history of the mobile home

The first mobile homes were derived from the travel trailer, a small portable living space with permanent wheels. Travel trailers were often used for camping and pulled behind vehicles for motorized highway travel. Larger units were developed to be used for several months in one location. These units were called house trailers.

The appeal of the house trailer was its mobility. Units were initially marketed to consumers with a mobile lifestyle, such as construction workers. But in the 1950s, manufactured homes began being marketed as an inexpensive housing option. They were beginning to be left in one location for a long period of time. Some homes were permanently installed with masonry foundations.

In 1956, a 10-foot wide manufactured home was sold. Previously, most trailers were only eight feet or less in width. The larger living space helped distinguish the mobile home from the travel trailer. Travel trailers could still be pulled by a vehicle, while mobile homes required a professional trucking service to move.

Throughout the 1960s and 1970s, mobile homes grew both longer and wider. Over time, they became less mobile and more like a home. Today, the average mobile home is placed in one location and never moved again.

Many consumers have turned to mobile homes as a more economical alternative to an on-site built home. However, many lenders look to mobile homes as a riskier type of housing. Securing a loan for a mobile home has meant shorter term lengths and higher interest rates. However, with the increased popularity in mobile homes, it is now easier to find financing options for purchase.

Are there legal complications?

Manufactured homes have often been taxed as vehicles throughout the years. This resulted in very low property taxes for mobile home owners. Most taxing jurisdictions have reclassified mobile homes as real estate property for taxing purposes.

Mobile homes have a high rate of depreciation in value. This has also led to decreased property taxes for many owners. Many jurisdictions have taken steps to limit the number of manufactured homes within a certain area, most often placing limitations on the size and density of developments that are comprised of mobile homes.

Mobile homes tend to depreciate in value like motor vehicles, while traditional homes appreciate in value. Many homeowners don't like to see mobile homes move into their neighborhoods, because they fear that their property values could be depressed by the depreciation.

The combination of tax issues and depreciation factors has led most jurisdictions to place zoning regulations on the areas in which mobile homes can be placed. There are often restrictions as to size, limitations on outside colors and foundation mandates. Many areas will not allow any future manufactured homes, while others have forbidden any single-wide models. Consumers looking to purchase land for a mobile home are advised to check jurisdiction regulations.

The mobile home park

Though often associated with the negatively-stereotyped trailer park, modern manufactured home parks are not like the trailer parks of the past. Most parks have standards in regards to size and styles of mobile homes allowed. Many are very similar to traditional subdivision developments.

In many mobile home parks, the homes are owned by the occupants and only the spaces are rented. There are a few developments in which the lots are sold, making them almost indistinguishable from traditional subdivisions. However, there are some lower-end parks where the units are rental units owned by a park operator. These developments are often considered to be trailer parks, and aren't looked upon well by neighboring property owners.

New mobile homes, especially double-wides, are built to much higher standards than trailers of the past. They are built to meet a set of universal building codes which are applicable to most areas. This has led to a decrease in the rate of value depreciation.

Modern manufactured homes have few differences from traditional homes. Many are built from materials similar to those used in site-built homes. They contain sheet-rock and plaster walls instead of paneling. They have fireplaces, whirlpool tubs and kitchen islands. One of the only noticeable differences is that mobile homes tend to have less of a roof slope so that they can be transported underneath bridges and overpasses.

More double-wides are sold than single-wides, due partly to the zoning restrictions and the options available in double-wides. Single-wides are still popular in some areas, where there are few restrictions. They are frequently used as temporary housing in areas affected by natural disasters.

The difference between a mobile and a modular

Mobile homes are similar but not identical to modular homes. Modular homes are transported to their locations on flatbed trucks, not towed with axels and an auto-frame like a manufactured home.

Most modular homes are transported in two pieces by two separate trucks. Each frame will have five or more axles t o support the house. Once on site, the house is positioned on a concrete foundation by a large crane.

Both manufactured homes and modular homes are classified as manufactured housing. Most zoning restrictions, however, only apply to mobile homes, not modular homes. Most modular homes are indistinguishable from traditional housing once on a site. Many are transported separately from their roofs, making the telltale manufactured roofline unnecessary. The market for modular homes has increased over the past few years.

As the demand for housing, the price of housing and the quality of mobile home features increase, more people are expected to turn to the traditional manufactured home industry. Today's insurers and lenders often treat high-end double-wides just as they would a traditional home when it comes to coverage and lending terms.

Mobile homes vs. Tornados

Mobile homes are often associated with tornado activity in the Midwest. This is due to the perception that tornados strike mobile homes more frequently than other structures. This is simply a myth. Tornados do not strike manufactured homes any more or less than other types of homes.

But when a tornado does strike a mobile home, the damage is far worse than it would be to a site-built home. Many manufacturers offer and suggest the use of optional hurricane straps, which are used to tie the home to anchors embedded in the ground. This gives extra protection for the home during heavy winds.