Manufactured Housing News

Buying a mobile or manufactured home can be a great way to become a homeowner, especially for self-employed people who might have unique financial challenges. However, financing a manufactured home can be different from financing a traditional home, especially when you are in charge of your own finances. Thankfully, Triad has some tips to help self-employed buyers navigate this process.

Understand Your Financing Options

Manufactured homes can be financed in several ways, each with its own set of requirements and benefits:

1.    Personal Property Loans (Chattel Loans): If your manufactured home will not be permanently affixed to the land it sits on, you could consider a chattel loan. These loans often come with higher interest rates and shorter terms but can be fairly easy to obtain if you don’t own the land. 
2.    FHA Loans: The Federal Housing Administration offers loans specifically for manufactured homes through its Title I and Title II programs. These loans usually have lower down payment requirements and competitive interest rates, making them attractive options for buyers.
3.    Conventional Mortgages: If your manufactured home is permanently affixed to the land underneath and is classified as “real property,” you might qualify for a conventional loan. These loans often have stricter credit and income requirements but can come with favorable terms.
4.    VA Loans: Veterans and active-duty service members might qualify for VA loans, which can be used to finance manufactured homes. These loans come with benefits like no down payment and no private mortgage insurance (PMI) requirements.

Get Your Financial Documents Ready

People who are self-employed often have more unique financial situations, making documents especially important. Here’s what you’ll likely need:

1.    Tax Returns: Lenders usually require at least two years of tax returns to verify your income. Make sure your returns are complete and accurately reflect your earnings.
2.    Profit & Loss Statements: These documents help lenders to understand your financial health. Make sure they are up-to-date and professionally prepared.
3.    Bank Statements: Provide several months of personal and business bank statements to demonstrate your cash flow and savings.
4.    Debt-to-Income Ratio: Calculate your debt-to-income (DTI) ratio. Lenders use this metric to determine your ability to manage monthly payments. Aim to keep your DTI below around 43%.

Boost Your Credit Score

A higher credit score can greatly improve your chances of finding good loan terms. Here are some tips to boost your credit score:

1.    Pay Bills on Time: Consistently paying bills on time is one of the best ways to improve your credit score.
2.    Reduce Debt: Pay down existing debt to lower your credit utilization ratio. This can positively impact your credit score.
3.    Avoid New Credit: Refrain from opening new credit accounts or taking on additional debt during the home buying process.

Save for a Down Payment

While some loan programs offer low or no down payment options, having a solid down payment can improve your loan terms and reduce your monthly payments. Aim to save at least 10-20% of the home’s purchase price.

Related: Mobile Home Down Payment Assistance Options in Florida

Seek Professional Advice

Consider working with professionals who understand the unique challenges self-employed buyers face in this market, such as:

1.    Mortgage Brokers: A broker can help you compare several loan options and find the best fit for your financial situation.
2.    Accountants: A professional accountant can help you organize your documents and optimize your tax returns to present the best overall financial picture to lenders.
3.    Real Estate Agents: Agents with experience in manufactured homes can provide valuable insight and help you find properties that meet your needs.
4.    Experts That Specialize in Mobile Homes: Companies like Triad understand the exact process you’ll go through in order to secure financing for a manufactured or mobile home. Talk to the experts about what you’ll need as a self-employed homeowner. 

Being self-employed shouldn’t limit your options when it comes to financing a mobile home. Triad knows how to help you confidently navigate this process, and move one step closer to becoming a homeowner.