Manufactured Home Cheat Sheet

Manufactured homes are generally financable with a few stipulations:

• Home must be manufactured after June, 1976*.
• Home must be on a permanent foundation with wheels and axles removed.
• Manufactured homes can be singlewide, doublewide, or larger.  Homes must be at least 12 feet wide and have a minimum of 400 square feet of gross living area.  
• The home can only have been moved once - from the factory to the current site.  The exception to this rule is VA and Freddie Mac transactions.  Both allow a previously installed home to be moved to another site, subject to additional requirements.
• A manufactured home cannot be financed as an investment property (primary residence or second home only).

Manufactured Homes on Leased Land

Manufactured homes on leased land are trickier.  If the home is in a manufactured home park, it's generally a "no," since those homes are classified as personal property instead of real estate.  But land leases like Lake Cushman or Beckett Point can often work.  Additional requirements include:

• Home may be doublewide or singlewide (FHA only).
• Purchase or rate term refinances only.  No cash out refinances.
• The manufactured home cannot include an ADU on the property.
• The appraiser must provide two comparable properties that are also on a leasehold estate.
• The lease must meet all the requirements of a leasehold estate.  Namely, the manufactured home must be classified as real property that can be covered by a title insurance policy.  The term of the lease must run for at least five years (conventional) or ten years (FHA) beyond the maturity date of the mortgage.

Additional Inspections for Manufactured Homes

FHA transactions require manufactured homes to have a foundation inspection or structural engineer's report.  For VA transactions, the appraiser is expected to identify applicable state and local manufactured-home requirements and condition for a foundation inspection when they feel it is required.

And the appraiser may check to see that L&I inspections have been obtained.  Check here to see the kinds of modifications that require an L&I permit.  I recommend that real estate agents look for things that couldn't possibly be original to the home.  For instance, if your 1984 manufactured home has a fancy new tankless hot water heater, it probably needs an L&I inspection.

Don't panic if the work was completed without the required L&I permit.  There are processes for addressing previously unpermitted alterations.  The documentation, cost and inspection requirements will depend on the work that was done.

Manufactured Homes as ADUs

• Fannie Mae: If the property has an ADU, the primary dwelling must be site-built or modular — manufactured-primary-plus-ADU doesn't work under Fannie.  The ADU itself may be a single- or multi-width HUD-code manufactured home, as long as it's classified as real property and meets Fannie's other manufactured-home requirements.
• Freddie Mac: Freddie now permits an ADU on a property secured by a manufactured home, as long as the primary manufactured home is multiwide — think a multiwide on Whidbey Island with a manufactured ADU out back.  The ADU itself may also be a manufactured home — it must be real property, have at least 400 square feet, and meet the standard manufactured-home requirements.  In other words, two manufactured homes on one parcel can potentially work under Freddie now, with one as the multiwide primary and the other qualifying as the ADU.
• FHA: FHA now recognizes manufactured housing as "one-unit or one-unit with an ADU."  Its appraisal guidelines specifically allow an appraiser to treat an additional manufactured home as an ADU when it meets highest-and-best-use and FHA requirements.
• VA: A manufactured home on the site may qualify as an ADU, with the appraiser determining whether the property is appropriately a single-family home with an ADU versus a two-family property.

If you are listing a manufactured home (or are interested in purchasing a manufactured home), please give us a ring!  We're happy to take a look at your parcel and offer our expert opinion.

* The exception is USDA transactions.  USDA allows existing manufactured homes with a manufacture date within 20 years of the loan closing date.