Modular home buyers can buy the land on which the home will sit thru FHA loan. The Federal Housing Administration (FHA) insures both modular home loans and the land loans for people buying prefab homes.

FHA Loan Funding and Insuring

Before the FHA will insure the loan for the modular home, it must be installed correctly according to state, county or the local jurisdiction’s codes. One of the benefits of using the FHA loan for a modular home purchase is that this agency provides two levels of consumer protection. The first is the placement and setup of the home, and as noted above, because the FHA not insures the loan until it passes inspection.

The second benefit is that the FHA loan will help consumers with warranty issues. Most modular homes come with one-year warranties. Since the homes are transported, they may need repairs for incidental cracks in the windows or walls. Buyers of modular homes can contact FHA during the first year with assistance for warranty work from the seller of the home. But remember that FHA involvement in warranty protection is just for new modular homes.

FHA Loan Limits

The terms of the FHA loan are shorter than loans for site-built or modular homes. FHA requires the loan for the modular home to be 20 years or less, while the loan for the land can only be for 15 years. When buying a lot and a modular home together, the loan period is 25 years.

Since modular home construction is less costly to build because they are constructed off-site, they are less expensive to buy than most site-built homes. In areas of higher priced homes and real estate, the FHA allows those limits to increase up to 85 percent for both the home and land.

In case you still have questions about modular homes, you may contact Legendary Homes Inc in Jackson, Michigan. A representative will be happy to assist you. Meanwhile, you can check our modular home price sheets by signing up to our blog.

Topic: Modular Home Financing, FHA Loan

An FHA loan is a mortgage loan that is insured by the Federal Housing Administration (FHA). It has come a long way to help home buyers.

An FHA loan has a number of pros and cons that you need to consider.

Pros of FHA Loan

Typically an FHA loan is one of the easiest types of mortgage loans to qualify for because it requires a low down payment and you can have less-than-perfect credit. An FHA down payment of 3.5 percent is required. Borrowers who cannot afford a traditional down payment of 20 percent or can’t get approved for private mortgage insurance should look into whether an FHA loan is the best option for their personal scenario.

Another advantage of an FHA loan is that it can be assumable, which means if you want to sell your home, the buyer can “assume” the loan you have. People who have low or bad credit, have undergone a bankruptcy or have been foreclosed upon may be able to still qualify for an FHA loan.

Cons of FHA Loan

You knew there had to be a catch, and here it is: Because an FHA loan does not have the strict standards of a conventional loan, it requires two kinds of mortgage insurance premiums: one is paid in full upfront – or, it can be financed into the mortgage – and the other is a monthly payment. Also, FHA loans require that the house meet certain conditions and must be appraised by an FHA-approved appraiser.

In case you still have questions about modular homes, you may contact Legendary Homes Inc in Jackson, Michigan. A representative will be happy to assist you. Meanwhile, you can check our modular home price sheets by signing up to our blog.

Topic: Modular Home Financing, FHA Loan

FHA defines a modular home as “a structure that is transportable in one or more sections. And they set a number of requirements to successfully have a FHA loan.

An FHA loan is a mortgage loan that is insured by the Federal Housing Administration (FHA). Essentially, the federal government insures loans for FHA-approved lenders in order to reduce their risk of loss if a borrower defaults on their mortgage payments. The following are the requirements on how to apply for FHA loan.

Residency Requirements

The person applying for FHA loan for his modular home should have a valid Social Security number, lawful residency in the U.S. and be of legal age to sign a mortgage in your state. Remember that it new loans are only available for primary residence occupancy.

FHA Loan Down- payment

Must make a minimum down payment of 3.5 percent. The money can be gifted by a family member.

Good Credit Score

Minimum credit score of 580 for maximum financing with a minimum down payment of 3.5 percent. Typically you must be two years out of bankruptcy and have re-established good credit. Exceptions can be made if you are out of bankruptcy for more than one year if there were extenuating circumstances beyond your control that caused the bankruptcy and you’ve managed your money in a responsible manner.

Modular Home Complies with Standards

Also, an FHA loan requires that a property meet certain minimum standards at appraisal. If the home you are purchasing does not meet these standards and a seller will not agree to the required repairs, your only option is to pay for the required repairs at closing.

In case you still have questions about modular homes, you may contact Legendary Homes Inc in Jackson, Michigan. A representative will be happy to assist you. Meanwhile, you can check our modular home price sheets by signing up to our blog.

Topic: Modular Home Financing

FHA loan is not perfect, but they are a great fit in some situations especially with modular home financing. The main appeal is that they make it easy to buy property, but don’t forget that those benefits always come with tradeoffs. Here are some of the most attractive features:

Lower Down Payment

FHA loans allow you to buy a modular home with a down payment as small as 3.5%. Other loan programs generally require a much larger down payment.

It’s easier to use gifts for downpayment and closing costs. In addition, sellers can pay up to 6% of the loan amount towards a buyer’s closing costs. You’re most likely to benefit from that in a buyer’s market, but those do come around from time to time.

Lower Cost Interest Modular Home Loan

A modular home buyer can “take over” your FHA loan if it’s assumable. That means they will pick up where you left off – benefiting from lower interest costs. Depending whether or not have changed by the time you sell, the buyer might also enjoy a low interest rate that’s unavailable elsewhere.

A Chance to Reset

If you have recently come out of bankruptcy or foreclosure, it’s easier to get an FHA loan than a loan that does not come with any government guarantee (two or three years after financial hardship is enough to qualify with FHA).

In case you still have questions about modular homes, you may contact Legendary Homes Inc in Jackson, Michigan. A representative will be happy to assist you. Meanwhile, you can check our modular home price sheets by signing up to our blog.

Topic: Modular Home Financing