Financing a New Modular Home or Manufactured Home: An Overview

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Getting the truth when it comes to your new loans and financial responsibilities can be difficult. Many in the financial community want to educate people looking to buy a new home, but find it difficult to get all the information in the simplest terms possible. has the many resources necessary and the experience in the industry to get you the information you need to understand when financing a new modular or manufactured home. Below is a general overview on ideas that are all touched on in other forms on the site, with links to those articles for more in-depth information on every relative part of the modular homebuying process, to ensure that the choice being made is the best one for your family and financial situation!


A completed modular home becomes real estate; in other words, it has all the advantages of a traditional site-built home and more. And manufactured homes do not become real estate when delivered, which presents its own unique financing terms and opportunities! There are three important advantages that equal or trump site-built homes. First, your modular home or manufactured home will be equal and often superior in quality to a comparably sized site-built home. Second, modular homes and manufactured homes are move-in ready in a fraction of the time compared to site-built. And third, the biggest plus, is that financing a new modular home or manufactured home will qualify you for loans with the same terms, conditions, appraisals, and low-interest rates as a site-built home.

Loan Types:

A traditional loan is a mortgage on an existing home, generally for a 30-year term. These mortgages are plentifully available from conventional lenders, mortgage companies, banks, savings & loans, credit unions, etc. Also, they’re available through special government programs like those offered by the FHA (Federal Housing Administration) and the VA Loans (Veterans Affairs). A traditional loan does not commence until the home construction project has been completed. You will need a second loan, a construction loan, to pay for contractors as the home completion process continues. These incremental payments are called construction draws.

The draw schedule will be determined by agreement with your building contractor. The first draw is usually to the manufacturer to cover the cost of the home incurred prior to delivery to the site. The term of a construction loan is for the predetermined length of time it takes to complete the home setup process. You only pay interest on the monies advanced as you go. When the home is completed and ready for occupancy, your primary lender will pay off (take out) the construction loan which will automatically activate your permanent mortgage. Your construction loan and permanent loans do not have to necessarily be with the same lender. These are just some of the positives buyers experience when financing a new modular home or manufactured home, and is your source to learn them all!


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