When it comes to buying or refinancing manufactured homes, the title status plays a big role in whether you can secure financing. One title type that often raises eyebrows is the salvaged title, a designation that signals the home has been damaged in the past and declared a total loss by an insurance company.
But does a salvaged title mean the end of your financing options? Let’s break down what you need to know about manufactured housing, salvaged titles, and how they affect manufactured home loans.
What Is a Salvaged Title?
A salvaged title is issued when a manufactured home has suffered significant damage, often from natural disasters, fires, or accidents, and the cost of repair exceeded its insured value. After repairs, the home may be re-certified as livable, but the “salvaged” designation remains on the title permanently.
While this doesn’t always mean the home is unsafe, lenders view a salvaged title as a red flag because it signals higher risk, reduced resale value, and potential hidden issues.
Why Lenders Hesitate to Finance Salvaged Title Homes
Most traditional mortgage lenders and manufactured home loan programs (such as FHA, VA, and USDA) require the home to meet strict safety and structural standards. A salvaged title often fails to meet these criteria, even if repairs have been made.
Key lender concerns include:
- Structural integrity: Was the home repaired to code, and can it withstand future wear and tear?
- Market value: Salvaged homes typically have lower appraised values, which impacts loan-to-alue ratios.
- Resale risk: Lenders want assurance they can recoup funds if they need to sell the property in the future.
Are There Any Financing Options for Salvaged Title Manufactured Homes?
While options are limited, financing is not always impossible. Potential paths include:
- Specialty or private lender: Some lenders specialize in higher-risk properties and may consider a salvaged title on a case-by-case basis.
- Chattel loans: If the home is being purchased without land, a personal property loan may be possible, though rates are often higher.
- Seller financing: The current owner may offer to finance the sale directly, bypassing traditional lender requirements.
- Refinancing after upgrades: In rare cases, if the home can be fully rehabilitated and inspected, you might reclassify the title (depending on state laws), making it easier to finance.
What to Consider Before Buying a Salvaged Title Manufactured Home
If you’re drawn to a salvaged title home because of its lower price tag, make sure you:
- Get a full inspection from a licensed professional familiar with manufactured housing.
- Check state regulations, some states impose restrictions on where salvaged homes can be installed.
- Understand resale limitations, as future buyers may face the same financing hurdles.
The Bottom Line
A salvaged title makes securing manufactured home loans much more challenging, but it’s not always an automatic “no.” If you’re open to alternative financing routes, work with lenders experienced in manufactured housing and carefully weigh the long-term implications.
At ManufacturedHomeLoans.com, we’re here to help you understand your options and connect you with professionals who know the ins and outs of financing—whether your home has a clean title or not.
Thinking about buying or refinancing a manufactured home? Start your search for the right lender today at ManufacturedHomeLoans.com, your trusted resource for all things manufactured housing finance.
